Generally speaking, “small-cap stocks” are companies with a market capitalization between $300 million and $2 billion. Investing in these small-cap firms comes with its own set of drawbacks and benefits.
While small-cap companies typically have much more upside for growth than some of their longer-established, larger-cap counterparts, small-caps also tend to have narrower customer bases, and can be more volatile and less predictable than blue chips on a day to day basis. For investors with a healthy risk appetite, though, the potential reward of investing in small-caps can be worth it.
