What Are The Small Cap Stocks?
Small cap stocks are when a companies has less than 500 million in market capitalization. The value of the stock does not measure the number of employees it is measured by the companies market value it holds.
Small cap stocks do not have the reputation that other large companies hold. It is possible to make a lot of money in these vestments but you need to know the pros and cons of small cap stocks before you decide to invest in them.
Advantages:Have the potential of earning better profits: as mentioned earlier 'small cap stocks' are the stocks of small companies. These stocks have the scope to grow in various ways unlike some of the bigger companies.Small companies are often started by individuals with great ideas and with lot of zeal and enthusiasm. This often leads to rapid growth of the company, which in turn increases its market value allowing the investor to make a lot of money.Easy to climb the stairs: such stocks also allows you to start from square one and go up the ladder changing your small cap stocks into large cap. Most of the big companies that we see today had started their journey of success as small companies with small cap stocks.
Disadvantages: Small cap stocks haven't been around as long as other companies. Their competition can often dominate a market and insure hard times for its competition. This involves a lot of risk. You do not know how stable the company is because you don't have the information you would like on a company that has been around for many years.
Although the media usually focuses on the dark side of small cap stocks, you should always remember that many a times investing in such stocks is a wise decision to take.
In conclusion, just remember to do your research and ensure that you pick a stock that has a growth potential and do not be afraid to take a risk for a large return. - 23218
Small cap stocks do not have the reputation that other large companies hold. It is possible to make a lot of money in these vestments but you need to know the pros and cons of small cap stocks before you decide to invest in them.
Advantages:Have the potential of earning better profits: as mentioned earlier 'small cap stocks' are the stocks of small companies. These stocks have the scope to grow in various ways unlike some of the bigger companies.Small companies are often started by individuals with great ideas and with lot of zeal and enthusiasm. This often leads to rapid growth of the company, which in turn increases its market value allowing the investor to make a lot of money.Easy to climb the stairs: such stocks also allows you to start from square one and go up the ladder changing your small cap stocks into large cap. Most of the big companies that we see today had started their journey of success as small companies with small cap stocks.
Disadvantages: Small cap stocks haven't been around as long as other companies. Their competition can often dominate a market and insure hard times for its competition. This involves a lot of risk. You do not know how stable the company is because you don't have the information you would like on a company that has been around for many years.
Although the media usually focuses on the dark side of small cap stocks, you should always remember that many a times investing in such stocks is a wise decision to take.
In conclusion, just remember to do your research and ensure that you pick a stock that has a growth potential and do not be afraid to take a risk for a large return. - 23218
posted by X - Men @ 1:35 AM
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