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

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 …

Read MoreA beginner’s guide to small caps