Even smaller than small cap stocks, micro cap stocks are companies who have a total market capitalization amount of less than three hundred million dollars. Usually, it is far less.
On average, micro cap companies have six million dollars or less in assets. Since they're so small, micro caps are sold for low prices and usually in low quantities. They're often a first choice for beginning investors who can't afford to buy large cap stocks but still want to invest in the stock market.
Since small businesses often fail, the risks of buying micro caps can be high. But invested in smartly, so can the rewards.
A micro cap stock offers the potential for huge gains, since small businesses have more room to grow than large ones. An early investment in the stock of a company that becomes successful and grows large can pay off big. But finding the best micro cap picks can be hard, since they often have very little public information available for you to study.
Large companies file their financial information with the SEC, making it an easy matter to research them. Micro caps don't have to file with the SEC and also don't have to meet the minimum listing standards of the NASDAQ or the other major exchanges.
These factors make it difficult to research micro caps. It's harder to find information on them, and the chances of fraud occurring are higher.
Trusting a professional who has more resources and experience in micro cap stock investing is important. We find the best micro cap picks and update our list regularly, and base our picks on solid research instead of just someone on an investment forum claiming to have 'inside knowledge'.
With our suggestions, you can buy micro caps with more confidence and know when the right time to sell is.
If you already have an account with an online broker website, you can buy micro caps just like any other stock. Type in the company's symbol and select how many shares you want to buy.
While you may be tempted to hold onto a micro cap pick that's making huge gains, remember that these stocks are among the most volatile and risky available. You can end up making a huge profit, but you can also lose your entire investment in the blink of an eye. Knowing when to sell is just as important as knowing what to buy.
Placing your trust in experience and following our advice can help you find success in the micro cap exchange.