Another stock market prediction for 2023? Small-cap stocks will crush large caps.

Going into this new year, large-cap stocks have traded around 17X forward earnings, while small-cap stocks have traded around 13X forward earnings. To put those numbers into perspective, large caps have reverted to “average” valuation levels, while small caps are trading near all-time-low valuations. That’s because investors have been playing defense against a potential recession by buying less-risky large caps.

Once the tide turns in 2023, they’ll ditch the large caps and play offense with small caps. And that will cause small-cap stocks to win big.

Watch the latest episode of Hypergrowth Investing to hear all our stock predictions for this new year!

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.