Good evening, The legendary Ohio State football coach, Woody Hayes, was asked about his aversion to passing the football. He responded that three things could happen when you pass the ball, and two were bad. It was a conservative approach that served the conservative coach very well. But with today’s focus on analytics, he wouldn’t last a season. And the same thinking is why ignoring small caps may not be an ideal investment strategy. To explain why, let’s first make sure to define what small-cap stocks are. Small-cap stocks are those of companies with a market cap between $300 million and $2 billion. They’re generally seen as having high risk but also the potential for a high reward. But before you dismiss the idea of owning small-cap stocks, consider these facts: - First, small-cap stocks tend to outperform growth stocks in a bull market. This is because investors have a larger appetite for risk.
- Second, historically small-cap stocks tend to be the first stocks that signal the end of a bear market. This means it’s about time in the market instead of timing the market.
- However, they also tend to underperform in a bear market (i.e., they have steeper losses).
This means that owning small-cap stocks can pay off for investors in two of these three scenarios. It’s at least a reason to keep them on your watch list, right? That’s the idea behind this special presentation. It focuses on seven small-cap stocks well-positioned for market trends likely to stick around through 2023. The good news about investing is that there’s room for both conservative and aggressive approaches in every portfolio. The key is to know what you own. Each of the small-cap stocks in this presentation has a thesis that should allow for growth in current and future market trends. View the 7 Small-Cap Stocks That Could Rocket Higher in 2023 Rebecca McKeever
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