Small-Cap Investors Need to Take Risks to Gain Rewards

Jun. 13, 2022 | RedChip Companies

As investors, we’re always making decisions that try to find the right balance between risk and reward. In the small-cap markets in particular, the rewards can be substantial. Of course, the inverse of that is small-caps can lose significant value as well. To balance that risk and position yourself for the substantial rewards available from the right opportunities it’s important you properly diversify among a basket of small-caps. Don’t put all your small-cap money in just one or two stocks. Instead, spread your investment money out over a larger number of stocks and keep constant watch for changes in the reasons behind why you acquired each stock. When things change for the worse, don’t be afraid to take your losses. Additionally, when selecting which stocks to buy, look for strong businesses that address large unmet market needs and try to find opportunities that are immune to broader market swings. These are the types of things we look for here at RedChip, and our impressive track record is testament to the fact that it works.

"I work with many of the companies that would be RedChip companies. And we certainly ascribe to the same view that the RedChip Companies do, which is Discovering Tomorrow's Blue Chips Today."

  • Bob McCooey, Senior Vice President, NASDAQ Stock Market