Small firms outperform large ones in stock market returns for decades.
Smaller companies tend to have higher returns compared to larger ones in the stock market. This trend has been observed for at least forty years, suggesting that the usual way of predicting stock returns might be wrong. The difference in returns is most noticeable for very small companies, while medium and large companies show similar returns. It's unclear whether the size of a company directly causes this effect or if it's just a stand-in for other unknown factors linked to size.