Small Cap Index at an All-time High! Should You Rejoice or Worry?

The small-cap investing mania seems to be unceasing.

The S&P BSE SmallCap Index, after a brief correction, has hit an all-time high (of 47,599 on April 29, 2024).

It appears that the froth building in the small-cap segment (as highlighted by SEBI earlier this year) and the stress test data of Small Cap Funds are not bothering investors.

But it’s important to note that during periods of high volatility and market turmoil -- when many investors would sell in panic -- small-caps could fall more compared to mid-caps and large-caps.

In such times, the risk increases, and so does the number of days to liquidate a small-cap portfolio.