Should You Invest in Small-Cap Stocks?
Did you know that the S&P 500, an index of 500 of America's most recognized and dominant companies, has returned an average of 10% annually over its lifetime? That's nothing to sneeze at, but why don't Wall Street's biggest and baddest corporations generate higher returns?
While the average market value of an S&P 500 stock is roughly $60 billion, it's hard for companies at the top of their industry to grow enough to continue multiplying in size once they reach these levels. Sure, you may get the occasional mega-cap stock ($200 billion value or higher), but a small handful of stocks ever reach that milestone.
You must find the next big thing if you're chasing even larger investment returns. Consider looking at small-cap stocks with values between $300 million and $2 billion. Here is why they can juice up your portfolio returns and how to tell if they're right for you.
Source Fool.com
