Pace 360 Co-Founder, Amit Goel explains why large caps currently offer more comfort compared to mid and small caps. While small and midcap stocks have seen a sharp run-up, their valuations have stretched far beyond earnings support, making them vulnerable in a short-lived or volatile market phase. Large caps, on the other hand, have largely moved sideways over the past year and now trade near their 10-year average valuation levels, supported by steady—though modest - earnings growth. With foreign institutional investors likely to re-enter the market, their preference historically leans toward liquid, blue-chip names. This, combined with relative valuation stability, leads to a strategy favoring large caps for a short- to medium-term rally rather than chasing momentum in smaller stocks.

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