How Do Small-Cap Stocks Fit Into My Investment Mix?
Where an investor falls on the large-cap vs. small-cap debate normally aligns with their risk appetite.
More risk-on investors, and usually those with longer investment time horizons, tend to prefer riding the small-cap wave, seeking the higher upside of (typically) younger companies on the rise. On the other hand, large-cap companies are more established and considered safer investments due to their (typically) healthier balance sheets, stronger and more stable cash flows, better access to capital markets, and better customer stickiness.
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