Divergence creates a 'good setup' for small-caps in 2025: Strategist

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Horizon Investments head of research and quantitative strategies Mike Dickson shares his market outlook for 2025 on Catalysts.

Dickson emphasizes "an enormous divergence" between top-performing stocks and average market performers throughout 2024. He notes that this marks the second consecutive year of "some of the most dismal performance for the average stock relative to the market cap-weighted indices."

Looking ahead to 2025, Dickson expresses optimism, stating this environment "really sets up well for some catalysts to be able to drive that spread closer and actually see the broadening-out in the market that we've all been waiting for for a while."

Specifically, Dickson identifies small- and mid-cap stocks as potential outperformers, citing proposed policies under the incoming Trump administration. He suggests that current weakness in this sector presents an attractive entry point for investors planning their 2025 strategies.

To watch more expert insights and analysis on the latest market action, check out more Catalysts here.

This post was written by Angel Smith