Whenever there is an increased volatility and market turmoil, we often witness a huge drawdown in the small and mid-cap stocks. This is imperious purely from their market capitalisation. So, when investors sell there would be a huge crunch in the liquidity which hits these stocks immediately.
This brings us to rebalance our portfolios that would take in to consideration of the market conditions. That would discount the exposure to mid and small caps while an increase in large caps is natural.