How Small Caps are Going to Influence the Market in 2020

Get Ready for a Huge 2020.It’s been shown small-cap stocks can outperform large-cap stocks over time, so it’s not surprising that many investors want to include up-and-coming small caps in their investment portfolios. The challenge is figuring out which are the best small-cap stocks to buy, and knowing when to buy them can be even more challenging. To help, I scoured the Russell 2000 for small-cap stocks that could be perfect additions to portfolios in 2019. I ended up with an eclectic group of small-cap ideas that cut across sectors and investment styles.

Wall Street winners come in all sizes, and sometimes it helps to think small. Companies with market caps below $2 billion — small caps — offer plenty of upside even if they aren’t large enough to be on the radar of most investors.

When Is the Best Time to Invest in Small-Cap Stocks?

Small-cap stocks and the mutual funds that invest in them can be smart long-term holdings, but knowing the best time to buy small-cap stock funds can help boost long-term returns. Most investors are wise to avoid the purest forms of market timing, but there are some strategic and tactical moves investors can make to adjust small-cap stock fund allocation at certain opportune times.

When and Why Small-Cap Stocks Can Beat Large-Cap Stocks

From an intuitive perspective, small companies can begin to rebound in growing economies faster than larger companies. Their collective fate isn’t tied directly to interest rates and other economic factors to help them grow. Like a small boat in the water, small companies can move faster and navigate more precisely than the large companies that move like giant ocean liners.

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Insider buying could be a bullish signal for a stock. When an insider of a company wants to buy or sell their company’s stock, they need to inform the U.S. Securities and Exchange Commission. An insider is a person who has access to confidential information about a company. In other words, the important people in a company need to tell the public if they are buying or selling their company’s stock.

I always like to know what the insiders are doing when I consider making an investment. Even more so, I like to see if they are buying after the price has dropped dramatically. A lack of insider buying could suggest that the selloff was justified, while meaningful buying could be a significant bullish signal.

There are many reasons why an insider of a company may decide to sell. They may need money tuition or to buy a new house. But there is only one reason why an insider would buy their company’s stock. They believe it is undervalued and eventually they will make money.

Stock Market News, Stock Advice & Trading Tips

There has been significant buying by the insiders in the following micro-cap and small-cap stocks recently.

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