Are you looking for the perfect investment opportunity that offers superior earnings growth at a reasonable price? Look no further than mid-cap stocks, according to Goldman Sachs. While the debate between large-cap and small-cap stocks continues, the real Goldilocks opportunity lies in mid-cap equities, with the S & P 400 MidCap Index projected to notch 13% returns over the next 12 months.
Goldman Sachs anticipates that mid-cap stocks will outperform both large-caps and small-caps due to their combination of low starting valuations and solid economic growth in 2025. Historical trends also support this notion, as the S & P 400 MidCap Index has recorded an 11% compound annual growth rate since 1985, outperforming the S & P 500 and the small-cap Russell 2000.
One of the key advantages of investing in mid-cap stocks is their cheaper valuations relative to large-cap stocks, making them an attractive source of returns for investors in the long term. In addition, mid-caps have “stronger fundamentals” compared to their small-cap counterparts, providing investors with the opportunity to buy growth and quality at a discounted price.
Looking for some specific mid-cap stocks to add to your portfolio? Goldman Sachs strategist Jenny Ma recommends high-quality names with the potential to grow, such as Neurocrine Biosciences, BioMarin Pharmaceutical, e.l.f. Beauty, Celsius Holdings, and Wingstop. These stocks are not only trading cheap relative to their historical levels but also offer a promising outlook for future growth.
If you’re ready to capitalize on the Goldilocks opportunity in the market, consider adding mid-cap stocks to your investment portfolio. With their superior earnings growth potential and reasonable valuations, mid-cap stocks offer investors the perfect balance between risk and reward. Stay ahead of the curve and make the most of your investment strategy with the latest insights from Extreme Investor Network.