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.

  • 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