Starting small is usually good advice when beginning a new endeavor. If you’re trying to get back in shape, a quick run or light workout is a better starting point than a marathon. However, that logic is counterintuitive when it comes to stocks. Bigger stocks tend to be safer and less volatile, while small ones can move wildly from session to session. Small-cap investing isn’t for the risk-averse, but in this article, we’ll explain the pros and cons of buying small companies and how to spot potential winners amidst a sea of unknown firms.
