# When do we reach the bottom of the dip? (2022-24 Edition)

**URL:** https://forum.mustachianpost.com/t/when-do-we-reach-the-bottom-of-the-dip-2022-24-edition/7762
**Category:** Investing / Others
**Created:** [January 22, 2022, 4:29pm UTC](https://forum.mustachianpost.com/t/when-do-we-reach-the-bottom-of-the-dip-2022-24-edition/7762 "2022-01-22T16:29:32Z")
**Posts on this page:** 1
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### Author: ![Wolverine](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/wolverine/32/3315_2.png) [@Wolverine](https://forum.mustachianpost.com/u/Wolverine)
#### Post date: [August 6, 2023, 12:01pm UTC](https://forum.mustachianpost.com/t/when-do-we-reach-the-bottom-of-the-dip-2022-24-edition/7762/663 "2023-08-06T12:01:44Z")

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> [@dom.swiss](#):
>
> Lesson 12: In general, small cap stocks outperform. Smaller stocks generate a higher return on the stock market. Between 1926 and 2006, the smallest decile stocks compounded at a CAGR of 14.0% compared to 10.3% for the S&P500.
> 
> Lesson 13: Cheaper stocks outperform the market. Based on the price-earnings ratio, the 20% cheapest stocks outperformed the S&P500 by 3.2% between 1957 and 2006.

Just a qualifier on that: when he says to ‘invest for the long term’, this holds doubly true for small caps (value). The chart below is from Paul Merriman and it shows the performance of US small cap value vs the S&P500. In the past, most of the additional gains have been concentrated in a few years and you’ve had to endure periods of up to 19.5 years of underperformance in order to capture the outperformance, that’s a very long time during which, in order to be successful, you have to stay your chosen course despite all the probable second guessing going around (while others are able to tout some random investment that is going to the moon).

 ![image](https://forum.mustachianpost.com/uploads/default/original/2X/c/cbb52063636814b61baa69bcb3d5ddd440f11468.png)

Source for the chart: [https://paulmerriman.com/wp-content/uploads/2021/01/2020-Year-End-Podcast-Charts.pdf](https://paulmerriman.com/wp-content/uploads/2021/01/2020-Year-End-Podcast-Charts.pdf)

I believe the related podcast is this one: [Spotify – Web Player](https://open.spotify.com/episode/3zOjxXKeXe0qFtToiroxPe)

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