Comparing SPY vs SLY, we see 4 stages:
2005-2009: They tracked each other almost perfectly for 4 years straight.
2009 - 2014: Significant SLY performance
2014-2017: Significant SPY outperformance
1st 9 months of 2018: A vicious SLY rally that almost matches the SPY gains of the prior several years
Sept 2018-Present: SPY vicious outperformance in both the drawdown and market rally.

Dividends are currently 1.77 vs 1.38 in favor of SPY.


Does anyone have any explanations for each of these periods? (I know it's not really apples to apples given the short time periods during 2018, but each period seems interesting enough to deserve its own discussion.)

I'll throw out some more specific questions later but one is particularly interesting:

What (if any) are the overall market implications of small caps getting crushed unusually strongly and not recovering as quickly as the SP500?

Small-cap performance has often been thought of as a leading economic indicator. If the economy is doing well so will small companies. In those periods where small-caps under-performed or matched like in the period that encompassed 2008 investor sentiment was negative. 2015 wasn't good either. Generally when people are bullish small-caps will do well.

It's funny you mention this because I've been watching the Russell 2000 recently seriously lag and actually downtrend vs the major indices and it def is troublesome in my opinion for all stocks if it continues.

How do you explain 2005-2007? 3 year outlier?

Idk yeah there doesnt always have to be a cause