Rockets Speed Up! Large-Caps Left Behind
Technology stocks have been in the news for months now, and the surge in small-cap stocks has made headlines across the entire financial world. Small-cap stocks, companies with a market capitalization of $300 million or less, have seen an incredible boost this year, outpacing large-cap stocks, which are companies with a market capitalization of more than $10 billion. According to data from Godzilla Newz, small-caps had a median 20.4 percent return in July, compared to the S&P 500's 3.7 percent return. Small-cap stocks, which generally have a lower market capitalization and are generally more volatile, have seen strong gains in a variety of sectors based on the low market cap. These stocks, which are not typically tracked as heavily as large-cap stocks, can provide opportunities for investors who are looking for high returns. The gains in small-cap stocks have been particularly helpful to start-ups and micro-cap companies. These companies generally carry higher risks, but can also yield higher rewards. Small caps are often seen as more speculative investments, as they are much less liquid and carry a higher level of risk. In addition to the upside, investors should be aware of the potential downside risks that come with investing in small-cap stocks. These stocks may have lower liquidity and volatile price movements, meaning that if the company runs into trouble, investors may not be able to get out of their investments quickly. The high amount of risk associated with these stocks can also lead to higher losses if the company fails. For long-term investors looking for higher returns, small-cap stocks can be an attractive option with the potential for high returns. The key is to do research and understand the risks associated with the investments. Investing in small-cap stocks can be a lucrative opportunity, but it should not be done without due diligence.