This week's blogpost -

In this episode of the Thoughts and Money Podcast, hosted by Trevor Cummings, financial experts Blaine Carver and Brett Bonecutter delve into the recent performance of small cap stocks, specifically highlighting a 14-day streak of outperformance compared to large cap stocks. They discuss the difference between small cap and large cap stocks, the impact of interest rates on small companies, and the historical performance of small caps. Using analogies and practical examples, the hosts explain key concepts like market capitalization, risk and reward, and the importance of diversification. The episode underscores the necessity of a well-thought-out investment philosophy, anchored expectations, and the practical application of financial strategies.

00:00 Welcome to the Thoughts and Money Podcast

00:35 Introduction to Small Cap Stocks

01:53 Sweetwater: A Hypothetical Town

03:51 Investment Strategies and Risk

06:26 The Size Premium and Market Trends

15:48 Behavioral Finance and Long-Term Investing

21:58 Active Management in Small Cap Investments

22:51 Tailoring Investment Strategies to Individuals

23:51 The Importance of Diversification

24:04 Understanding Risk and Returns

25:25 Illiquidity Premium and Expected Returns

29:56 Private Equity and Leverage

34:56 Small Caps and Market Cycles

36:31 Building a Balanced Portfolio

42:01 Setting Realistic Investment Expectations

43:46 Final Thoughts and Listener Engagement

Links mentioned in this episode: