So far, 2019 has been a good year for small cap stocks. The Russell 2000 has had its best start since 1987. Is this a surprise? Not to many.

During periods of economic turbulence, The Russell 2000 has been known to leave the S&P 500 in the dust. It performed 80 percent better than the large-stock benchmark in 1979-1983, 50 percent better in 1990-1994, and 114 percent better from 1994 to 2014. And what we have seen at the start of this year may even be a sign of bigger things to come.

Currently, the Russell 2000 is up over 17 percent on the year— outperforming both the Dow and S&P 500. Many experts believe small cap stocks will continue to benefit from the current economic environment.

“Tax reforms haven’t had their full effect yet and because the tax code has just been re-written for these all domestic companies. Remember the majority of the sales for the Russell 2000 are all domestic… The market here still has the benefits of deregulation and tax reform in a way that no other geography has,” says Kevin O’Leary of Shark Tank— quoted by CNBC.

The domestic focus of smaller companies does make them less vulnerable to global issues, like trade wars between China and the U.S. Also, the strength of the U.S. dollar just hit four-month highs— weighing on bigger stocks. At this rate, small caps are the stocks to watch.