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STOCK REPORTS THAT CATERS TO THE INDIVIDUAL EARLY STAGE INVESTOR
WE HELP YOU FIND THE BEST START-UP AND SMALL-CAP COMPANIES.
Why invest in Penny Stocks, Micro and Small Cap Companies?
The primary advantage of investing in individual small-cap stocks is the significant upside growth potential that is unmatched by larger companies. Mergers and acquisitions, which are not uncommon among Start Up and Small-cap companies, represent another opportunity for small-cap investors.
Small-cap stocks tend to have higher growth rates. It is easier for a smaller company to double its sales, while more mature companies typically experience slower sales growth. In fact, some of the biggest companies in the world once traded in the small-cap range.
Many Stock Market Stars started out as
Start-ups or Small caps
If you had bought some of today’s blue chips, like Amazon and Netflix, when they were still trading as small caps and held them, you would have seen an increase in value of more than 100 times your initial investment.
Although small caps have historically outperformed large caps, that doesn’t necessarily mean your portfolio should consist of only small companies. However, startups and small caps belong in every growth portfolio, not only for reasons of diversification
Advantages and Risks of Small Cap Investments
Pros
Value
Small-caps aren't as well-known and overlooked by investors and therefore undervalued
Growth
Small cap companies offer a greater growth potential than larger companies
Return
Historically outperformed larger companies when it comes to average annual returns.
Agile
Smaller companies can be more agile than their larger counterparts, which can make it easier to adjust to changes in the stock market cycle, develop and launch new products or services, or undergo an internal restructuring if necessary.
Cons
Transparency
The challenge with small caps is that there tends to be less information
Volatility
By nature, smaller companies tend to be more volatile then well established large caps
Liquidity
Small cap stocks aren't as well-known and tend to be less liquid, which effects order execution
Risk
Small-cap stocks are riskier. Smaller companies are often startups with an unproven business, less-experienced executives, and limited access to capital. This makes their prospects less certain. Investing in startups will put the entire amount of your investment at risk
The Most Important Rule in Investment is:
Diversification
Diversification is not designed to maximize returns, you need diversification to minimize investment risk. Over time, a diversified portfolio generally outperforms the majority of more focused ones.
One key to diversification is owning investments that perform differently in similar markets.
Diversification Strategies
There are plenty of different diversification strategies to choose from, but their common denominator is buying investments in a range of different asset classes.
For example, stocks are an asset class, as are bonds, cash, real estate and alternative asset classes like commodities and cryptocurrencies.
Stocks can be further subdivided into Asset Classes
Industries and Sectors
Communication Services, Energy, Financials, Health Care, Industrials, Materials, Real Estate, Technology, Utilities ...
Company Size
History shows that the size of the company as measured by market capitalization, is another source of diversificaton,
Growth and Value
Newer, fast growing companies have different risk and return characteristics than older, more established firms.
Geography
The S&P 500 is made up of companies headquartered in the U.S., yet their business operations span the globe
Mistakes Investors make when they diversify:
Over Diversifying
Stock investors often include too many stocks in the portfolio. Many studies have shown that excessive stock inclusions di not actually reduce risk after a certain number of stocks. The general consensus amongst equity analysts and scholars point to anywhere from 15 -30 stocks.
We Stock Pick The BEST STARTUP and SMALL CAP COMPANIES FOR YOU
