Definition

Shares of a company with a relatively small market capitalization, which can offer growth potential but may be riskier.

What to consider

  • Research thoroughly as small caps can offer high growth but with increased risk.
  • Consider liquidity and market stability before investing.
  • Review financial fundamentals to assess long-term potential.

Real world scenarios

  • Looking for high growth potential, Irene invested in small cap stocks, which were companies with a relatively small market capitalization but promising prospects.

Related terms

Investments & Retirement