The Start of a Recovery? Check out the Small Caps.

I don’t have to tell you how volatile the stock market is right now. Add in all that angst around sky-high old prices, the housing/real estate debacle and rising job losses, and the economy seems to be heading even lower.

And if you’re an investor (which you might want to consider if you want to create some wealth), you’ve probably made major changes to your portfolio in order to ride out this drop in the market.

But things might be looking up. Yes, up.

How can I say such a thing? Well, according to an interesting article on yesterday’s NYTimes.com by Paul J. Lim, something interesting has happened recently that historically has led to a turnaround in the economy.

And that is the Russell 2000 Index of small caps has jumped 12.7% since mid-March.

That’s 12.7% in about 3 months!

I don’t know about you, but I’d take that percentage gain for the year and be happy right now.

According to the article, when small stocks rally during an economic slowdown, that has often indicated that the economy would get better, soon.

The article goes into a much more in-depth look at what this can all mean. So, if you’re looking for a clearer perspective on what might be happening, check it out here. And let us know what you think.