Small-cap stocks are a popular choice for investors looking to diversify their portfolios. But just how big is a small-cap stock? Small-cap stocks are typically defined as companies with a market capitalization between $300 million and $2 billion. This means that they are smaller in size compared to large-cap stocks, which have market capitalizations of over $10 billion.
Investing in small-cap stocks can be appealing for investors seeking high growth potential. These companies are often in the early stages of their growth cycle, which means they have the potential to deliver significant returns to investors. However, it’s important to note that small-cap stocks can also be more volatile than their larger counterparts, as they are more susceptible to market fluctuations and economic conditions.
DailyBubble believes that small-cap stocks can be a valuable addition to a well-diversified portfolio. While they may carry more risk than larger stocks, they also offer the potential for higher returns. It’s important for investors to carefully research and analyze small-cap stocks before making investment decisions, as thorough due diligence is essential when investing in smaller companies.