For many investors, the mantra “no risk, no reward” can apply to their decision of whether they choose to add small-cap stocks to their portfolio. Small-cap stocks are a class of stocks that showcase stocks that have an average market cap of between $500 million and $2 billion dollars. These stocks don't have some of the big names of stocks like Amazon or Apple, but the attraction to these stocks is that they can rise to that level. With 2019 just a couple of weeks old, the Russell 2000 Index, considered the standard mutual fund for small-cap stocks was up 9%. This, however, followed a double-digit loss in 2018.
Small-cap stocks have posted annual gains of over 12% from 1926-2017, a rate of growth that outpaces large stocks which have grown just over 10% over the same period. Small-cap stocks deliver this growth for several reasons including the ability of these stocks to provide diversification that can help investors experience growth when other stocks are sagging. These stocks also are typically U.S. companies which limit an investor's exposure to the volatility of international markets. Closer to home, these companies will be among the best positioned to benefit from the Trump tax cuts with small-cap companies expected to receive 5% more from the tax cuts than larger companies. And finally, small-cap stocks are less affected by the potential of a strong dollar. So however interest rate policy moves, these stocks should be able to be strong performers.
In this slide show, we’ve identified 8 small-cap stocks that are poised for solid growth in 2019. These stocks are all riding the wave of the current rally and have fundamentals in place that offer investors a good value.
Click the "Continue to Slide #1" button to view the first company.
