By Salvatore Bruno via

As the market skitters across the top of a very long bull market and interest rates continue their slow and steady rise, investors who want to stick with equities face an important question: What steps can I take today to help improve the position of my client portfolios—regardless of when (not if) the market turns?

Attempting to time the market surely isn’t the solution. After all, it’s just as difficult to foresee when the market will begin to turn south as it is to know when a downturn has hit bottom and will begin to head skyward once again. The result: trying to time the market adds risk at both ends of the equation.

So what’s the solution if maintaining equities exposure is a priority? One option to consider is turning to small cap equities, using a multi-factor investing approach seeking to help improve overall portfolio efficiency. Not only does investing in small caps require no market timing at all, but small caps also offer these distinct advantages:

  • Small caps have historically outperformed large caps over extended cycles and exhibited similar drawdowns during market downturns.

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