Nasdaq(NDAQ) The Motley Fool·2025-04-28 10:11Market Overview - The S&P 500 and Nasdaq-100 indices are currently about 10% and 13% below their respective peaks from 2025, indicating they are out of bear market territory [1] - Some index funds and actively managed ETFs remain in bear markets, defined as being 20% or more below their highs [1] Small-Cap Stocks - Small-cap stocks are trading at their lowest price-to-book valuations relative to large-cap stocks in over 25 years, with the gap widening since the start of 2025 [2] - The average stock in the Russell 2000 small-cap index has a price-to-book multiple of 1.8, compared to 4.6 for the typical S&P 500 stock [3] Investment Vehicles - The Vanguard Russell 2000 ETF (VTWO) is highlighted as a preferred investment option due to its low expense ratio of 0.07% and its diversified holdings across 2,000 small-cap stocks [4] - The Vanguard Real Estate ETF (VNQ) is currently 25% below its all-time high, affected by the rising-rate environment that has placed REITs in a technical bear market [5][6] Real Estate Sector - Elevated interest rates negatively impact REITs by making risk-free returns more attractive, increasing the cost of capital, and leading to declines in commercial property values [6] - There is potential for a turnaround in the real estate sector, with expectations of four 25-basis-point Federal Reserve rate cuts by year-end, alongside a 4.2% yield from the VNQ ETF [7] Technology Sector - The Ark Autonomous Technology & Robotics ETF (ARKQ) is an actively managed ETF that focuses on AI investment opportunities, differing from traditional AI index funds by not being top-heavy with big tech stocks [8][9] - The ETF is currently about 18% below its 2025 peak and 30% below its all-time high, presenting a potential investment opportunity for those interested in AI [10]