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Small-Cap Stocks

Small-Cap Stocks

They represent shares of companies with a market capitalization between $300 million and $2 billion. Examples of small-cap companies include Lattice Semiconductor, Flexion Therapeutics, and Viant Technology.

Benefits of Investing in Small-Cap Stocks

One of the key benefits of small-cap stocks is their growth potential. Because these companies are smaller and less well-known, they may have more room to grow. If a small-cap company is successful, it can experience explosive growth and generate significant returns for investors.

Another benefit is the potential for undervaluation. Because small-cap companies are less well-known and less widely traded, it can be easier to find a bargain or a great deal on these stocks.

Downside of Investing in Small-Cap Stocks

On the downside, small-cap stocks are riskier than large-cap stocks. Because these companies are less established, there is a higher risk that they could fail or go bankrupt. Additionally, these stocks may be less liquid than large-cap stocks, which can make it more difficult to buy or sell them quickly.

Author: Alex

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