Asset Classes

Small Cap Stocks

Small Cap Stocks

Equity

A small-cap stock is a stock of a publicly-traded company whose market capitalization ranges from $300 million to approximately $2 billion. Small-cap stocks have a bad reputation as the media usually focuses on their negative side,as they also say small caps lack the quality that investors should demand in a company. Indeed, these are all valid concerns for any company. Small caps also experience higher volatility, and individual small companies are more likely to go bankrupt than large firms.

More About Small Cap Stocks

  • They are often so small that WallStreet does not review them (not worth the time)
    • Not big enough to generate enough fees
    • They are often too small for big institutions to buy
    • This creates an opportunity for smaller investors to find value