Small & Microcap Investing

Small-Cap and Microcap Investing offer some real benefits to those investors seeking market outperformance. From stocks with small market capitalization, individual small-cap stocks offer higher growth potential, and small-cap value index funds outperform the S&P 500 in the long run. It also comes with disadvantages too. Small caps also experience higher volatility, and individual small companies are more likely to go bankrupt than large firms. The opportunities of small caps are best suited to investors who are willing to accept more risk in exchange for higher potential gains.

  • There can be more opportunities in smaller/microcap stocks
  • They are off the radar, so aren't as crowded
  • Fewest Investors are Looking here = More Market Inefficiencies = More Alpha Potential