I'm very encouraged by the value I'm seeing in todays small cap market. If we look at the Russell 2000 index which is a small cap market index, it has significantly underperformed the S&P 500.
I would argue that small caps are pricing in a recession whereas large caps are not. For historical context, the S&P 500 drops by 30-35% during a recession from peak to trough. It has dropped by 20% + from peak to trough since the start of 2022 but is now down by =~ 6.5% from its peak. On the other hand, the Russell 2000 index is currently down =~ 27% from peak levels. This is close to the drawdown that happens during a recession for the S&P 500.
In Canada, I see much better valuations than on the US side . In other words, now may be a good time to pick your spots for good quality small cap names. As always, be patient and keep some dry powder for opportunities in the future. Don't be greedy and don't be foolish.