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Anonymous
If iām planning to save for retirement and has conservative risk tolerance for equity. Large cap equity or small cap equity? which one is riskier? and which one is better to invest and why? which one suits my needs?
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There are studies that demonstrated (mild) superiority of small cap stock, for different time periods though the results are not always congruent, are the valid for the future? who knows?
don't worry too much, SP500 (VOO, IVV) or VT or VTI
seem decent investment products for the ultra-longterm investor
more on my thinking:
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Small caps tend to outperform large caps over the long run. Small caps are riskier (hence the higher...
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"Stocks for the Long Run" by Jeremy Siegel.
He goes in-depth into every single one of your questions.
TL:DR version: There is no such thing as a superior long-lasting advantage of small-cap or large-cap over a definite time horizon. The small-cap argument does not hold when you do it passively for certain time periods (Quite a majority in fact). Neither does the big cap argument (on the years that the small outperformed). One would do better to simply avoid looking for alpha and invest in the benchmark.
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