small caps

The pros and cons of trading small cap stocks

Small cap stocks are classified as stocks listed on the ASX with a market capitalization between $300 million to $2 billion. These can be highly risky but they can also offer very high rewards. In this article we discuss the pros and cons of trading in small cap stocks. Advantages Small cap stocks have the potential to reap very high share price appreciation as these companies are in the growth phases of development. The capital gains which can potentially be …

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When to buy large, mid or small-cap stocks

Similarly to sector rotations, the timing of when to buy and sell small and mid-cap stocks can maximise an investor’s portfolio. The size of a company has a huge impact on the characteristics of the stock. Knowing the difference between these types of companies will assist the investor to select the stock which is the most suitable for their needs. Understanding how different market caps react to market sentiment will help the investor protect capital and increase returns. Large Caps …

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A beginner’s guide to small caps

1.Size A small cap is classified as a company with a market capitalization between $300 million and $2 billion. 2.Risk Small caps are riskier than larger cap stocks as they are smaller companies and may still be in the growth stage.  Larger caps generally have a more mature business and have more resources to weather any economic downturns. As large cap stocks have been operating for a while, they have established clients and are more stable companies. 3.Returns As large …

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The Differences Between Small Caps, Mid Caps and Large Caps

Stocks on the Australian share market are categorised by their size. This is usually measured by a company’s market capitalisation. It is calculated by multiplying the company’s current share price by the total amount of shares on issue. A market cap is essentially what the market values the company at. The size of a company has a huge impact on the characteristics of the stock. Knowing the difference between these types of companies will assist the investor to select the …

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