Most folks on Wall Street and in the media don't focus on small cap stocks.
They're less valuable, more unknown companies, they typically don't involve significant sums of money, and they aren't as exciting as the larger available stocks to invest in today.
Many experts have made the claim that the lack of focus on small cap stocks is unwarranted.
Some claim that small caps are a better investment opportunity.
In addition to increased chance of growth comes increased odds for loss.
When choosing if small caps have a home in your portfolio be open minded..
Small cap stocks is the Wall Street slang for companies that typically have a less significant market capital presence (Usually between $1.
5 million to $150 million.
Exact definitions vary.
) Market capitalization is the price of a stock multiplied by the total number of shares that exist.
It's just the total worth that is placed on a company.
Large caps are more exciting because some investors because they are more reliable and safe.
The over arcing belief is that blue chip stocks are powerful and stable.
But like Enron, that isn't actually true.
Risk runs throughout the stock market, and with lessened risk, comes lower growth.
It might have taken a small stock like Wal-Mart to double in value, but for them to double again, now as a large stock, would be almost impossible.
This is where a small market appears for small time individual investors.
Small cap investments do exist and offer benefits for investment.
If you get in on the ground floor, the opportunities for growth are always there while larger investors can later pick the same stock and buy.