Small Cap Investing
Small Cap Investing Small cap investing involves buying shares of companies with relatively small market capitalizations, typically under $2 billion. These businesses often fly under Wall Street's radar compared to their larger counterparts. For investors willing to stomach some volatility, small caps can be compelling because they sometimes grow much faster than big companies when they hit their stride. Why put small caps in your portfolio? They offer diversification away from mega-cap stocks and can supercharge returns over long periods. Even when loan interest rates rise and pressure bond investments, small companies often adapt quicker than giants due to their agility. Definition of Small Cap Investing Simply put, small cap investing targets companies at the lower end of the market capitalization spectrum. Market cap is calculated by multiplying share price by outstanding shares. While definitions vary slightly, small caps typically fall between $300 million and $2 bill...