When new clients first come to our firm, we often find their portfolios packed with large-cap stock, companies that are valued at more than $10 billion. These are the companies that comprise the S&P 500. Although large-cap stock is a good place to start, once you begin to build a portfolio, it is important to include small-cap stocks — those with $300 million to $2 billion in market cap. These companies are much smaller, so they have greater potential to deliver outsized returns than larger companies.
In this video, we discuss the pros and cons of holding the small cap asset class in your portfolio and what you can expect in terms of performance over the long run. With more than 30 years of portfolio management, we know that this asset class has proven to reward patience and discipline.