Ian Wyatt has nearly 20 years of experience investing in stocks, and for the past eight years he has been sharing his insights into the financial markets with individual investors through his investment newsletter advisory services.
Ian has discovered over the years that small-cap stocks can provide the best long-term returns for investors. Small-caps are the one area where individual investors can truly have a leg up on Wall Street, due to the lack of analyst coverage and institutional ownership.
Finding the right small caps with big prospects for growth is Ian’s area of expertise. Through The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks, Ian shares his successful strategies for finding, researching, and evaluating small-cap stocks with big profit potential. T. Rowe Price found that in the 12 months following the previous nine recessions, small-cap stocks gained 24%, versus 17.6% for the S&P 500. Merrill Lynch discovered that in the 18 bear markets since the 1930’s, small caps gained an average of 41.4% in the 12 months after the end of the decline, compared with a gain of 32.4% for large caps. The goal of every investor is to beat the market by making savvy investment decisions that lead to out-sized profits. It is the smaller companies that are more innovative and growth oriented. And it is these companies that provide astute investors with the greatest upside potential for their investment portfolios.
Long-term superior performance of small-cap stocks
Over the long-term, small-cap stocks perform better than any other class of equities. While many investors consider small-cap stocks to be very risky, their long-term outperformance demonstrates that this class of equities is actually less risky. Not only can individual small-cap stocks deliver huge gains to investors, but as a whole, small-cap stocks dramatically outperform every other class of investment. Just look at the performance of small-caps versus large-caps, according to The New York Times.
Small-caps lead following recessions
Not only do small-cap stocks outperform over the long-term, but they perform especially well after a recession. It is the smaller, more opportunistic companies that are quick to roll out new products, take advantage of competitor weaknesses, and evolve quickly to achieve superior growth of revenues and profits. Two recent studies highlight the amazing performance of small-cap stocks following a recession:
- T. Rowe Price found that in the 12 months following the previous nine recessions, small-cap stocks gained 24%, versus 17.6% for the S&P 500.
- Merrill Lynch discovered that in the 18 bear markets since the 1930’s, small caps gained an average of 41.4% in the 12 months after the end of the decline, compared with a gain of 32.4% for large caps.
Now is the time for small-cap stocks
For investors looking to recover from the losses of the stock market crash of 2008 and early 2009, there is no better place to invest than small-cap stocks. Small, nimble, and efficient companies that are profit oriented and aren’t waiting for Washington’s bailouts are those that will recover first and grow their way out of the current economic downturn, stealing market share from the large, bloated behemoths that have dominated in previous decades. Investors who are seeking to recover from the bear market and are looking for growth in their investment portfolios must own small-cap stocks. Small-caps are simply the best opportunity for profit in the coming years.
Ian Wyatt has a proven track record for finding winners. Readers of The Small-Cap Investor: Secrets to Winning Big with Small Cap will learn how Ian has consistently uncovered huge stock market winners BEFORE these stocks have gone on to achieve great gains.
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