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Small-cap Equities
1,457 Mutual funds
7,553 Stocks
Source: Morningstar, 2020
Small-cap stocks are stocks of companies with a relatively
small market capitalization. The definition of small-cap is
generally a company with a market capitalization of less
than $2 billion. These are generally newer, less-established
companies, or companies in a constantly evolving industry
such as technology. One of the prime reasons for investing in
small-cap stocks is their potential for rapid growth. Of course,
risk and reward usually go hand in hand, so it is not surprising
that small-caps tend to be more volatile and more risky than
larger stocks. Small-cap stocks are not usually the leaders in
their industry. When investing in small-caps, investors hope
to find that small company at a low price that’s destined to
become the next Google or Microsoft.
Chapter 3: You Must Have Growth In Your Portfolio
