The Complications of Rotation

One of the most addictive feelings in investing is being early.

You spot something before the crowd, you plant your flag, and if it works, you get to tell the world you called it. 

Cue the retweets, the screenshots, the endless reminders of “we’ve been talking about this since…”

But here’s the reality: there’s a massive difference between talking about rotation and investing in rotation.

The people who spend all their time talking eventually end up talking about everything. 

They highlight what they got right and conveniently sweep aside the graveyard of what they got wrong.

And right now, the “rotation into small caps” narrative is starting to smell a lot like I just want to be first energy.

$IWM vs. $IWB - Small Caps vs. Large Caps

Take a look at $IWM vs. $IWB. This isn’t the first time we’ve heard “rotation is here.”

It’s the fifth.

5 Times...5 Times....5 Times....the ratio poked its head above the 200-day SMA, only to roll back over. 

That doesn’t mean this one can’t stick. It very well might. 

But pretending anyone knows with certainty? That’s just ego talking.

Here’s the thing: you don’t need to be early.

Trends take time. They don’t vanish overnight. If this rotation is real, there will be months, maybe even years to participate.

The market plays a cruel trick: it makes you feel like you’re missing out if you aren’t the first one in. 

But the truth is, markets trend. They give you more than one chance.

Right now, the small-cap vs. large-cap ratio is still in a downtrend trying to rotate. 

Until that move sustains, it’s just potential, not proof.

So don’t let the illusion of being left behind trick you into chasing. 

It's still early....at best.

Anyways, that’s my two cents.