We previously wrote about why large caps have outperformed small cap but in this article we discuss the environments where small-cap stocks can outperform large-cap stocks. Early Stages of Economic Recovery Small-cap stocks are often more sensitive to economic cycles and can benefit significantly when the economy starts to recover from a downturn. During this phase: Small-cap companies may experience faster revenue growth as economic activity picks up. They can quickly adapt to changing market conditions and capitalize on new …

Read MoreWhen do small caps outperform large caps?

Small caps tend to be growth companies which have potential to yield a better capital return than bigger companies. However, there are additional risks associated with these investments. In this article we discuss the pros and cons, who is suitable, and when the best time is to buy small caps. Characteristics: Small cap stocks are usually companies that are younger. They are generally looking to grow their businesses at an accelerated rate.  Small cap companies have a market cap between …

Read MoreWhat you need to know about small caps

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 …

Read MoreThe pros and cons of trading small cap stocks