Investing Advice

Small and Micro-cap Stocks

Companies whose stock value is under $100 million are usually referred to as micro-cap, and called small-cap if the total value of their stock is between $100 million and $1 billion. These are generally going to be newer companies without a solid track record, or maybe older companies that have fallen from grace because they are headed towards bankruptcy.

Historically, small-cap stocks, as a return on your investment, have outperformed large-cap stocks, not because a bunch of cheap, small companies are a better investment than big companies, but because almost all big companies were small when they first sold stock.

There are some funds such as Chuck Royce's Royce Low-priced Stock Fund and the Wasatch Micro-Cap Fund that have outperformed 99% of the "big-company" stock funds these past few years. This is evidence that there are fund managers that have the skill to pick the up and coming gems of these smaller companies.

Other Stock Market Basics Topics:

  1. Mutual Fund Advantages
  2. History of Mutual Funds
  3. NAV
  4. Dollar Cost Averaging
  5. General advice about choosing a fund
  6. Mutual Fund Ratings
  7. Evaluating Mutual Fund Investment Risk
  8. Mutual Fund Share Classes
  9. Mutual Fund Fees
  10. The Mutual Fund Prospectus
  11. How important is the manager's length of experience?
  12. Why is the prospectus hard to understand?
  13. Mutual Fund Annual Report
  14. Comparing your fund to the competition
  15. Comparing funds on an after-tax basis
  16. Average Return on Investment
  17. How Not to Pick a Mutual Fund
  18. Cashing in Your Fund
  19. When to Sell Your Fund
  20. Mutual Funds and Asset Allocation
  21. When to get started with a mutual fund
  22. Types of Mutual Funds
  23. Value Stock Funds
  24. Growth Stock Funds
  25. Small and Micro-cap Stocks
  26. Mid Cap
  27. Large Cap Companies
  28. Income Stock Funds
  29. Mutual Fund Index
  30. Enhanced Index Funds
  31. Sector Mutual Funds
  32. Stock Market Sectors
  33. Defensive Stocks
  34. International Funds
  35. Real Estate Mutual Funds
  36. Socially Responsible Funds
  37. Balanced Funds
  38. Tax-Efficient Funds
  39. Bond Convertible Funds
  40. Junk Bond Funds
  41. Mixtures of stock types
  42. Closed End Funds
  43. Exchange Traded Funds (ETFís)
  44. Stock Picking Strategy - Picking your own stocks?
  45. Fund names, and what they really invest in
  46. How to get started
  47. Where can I start investing with no money?

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