Stay small or go home

The buzz across investment circles these days is that of knives being sharpened for small-cap stocks and funds. The current 25 per cent plunge has prompted many industry veterans to issue dire proclamations: stop your SIPs (systematic investment plans) and run for your life. Everyone seems to be an expert on when to enter and exit this volatile market segment. What fascinates me about this situation isn't just the volatility but our collective response to it. When markets soar, we speak of 'conviction' and 'long-term vision'. When they plummet, these virtues transform into 'foolish stubbornness' and 'inability to cut losses'. This contradiction is pronounced in the small-cap space. Eight months ago, investors were clamouring to get into these funds, mesmerised by their eye-watering returns. Today, many are rushing to exit, abandoning their investment principles just as quickly as politicians aban