Small-Cap stocks are the stock of companies with a market cap in between $300 million and $2 billion. These companies are comparatively young and have the potential to deliver growth in the future. Small-cap companies generally do not provide dividends as they tend to reinvest the profit back into the business to achieve business growth.
Small-cap investors aim to beat institutional investors by focusing on growth prospects. These stocks have outperformed mid-cap and large-cap stocks. However, they carry a huge risk of losses. These are highly volatile and are considered a risky investment.
Investors prefer these stocks because:
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