Small-cap stock picks: Small-caps: Add quantitative measures to reduce risk. 5 small-caps from different sectors with upside potential of up to 38%
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Synopsis
There are 20 reasons/ explanations/ justifications put on the table for every move the market makes. Especially now, as the Nifty and Sensex recover from five months of correction. These explanations have their own role in the stock market, and it is sometimes good to listen to them. But, whether it is small-caps or mid-caps or large-caps, earnings and their stability are what finally matters in the market. And earnings are dependent on growth potential as well as the ability of the management to deliver growth. So, as the market recovers, focus on two things. First, whether there was a slowdown in the earnings of the company. And if yes, whether a recovery has taken place in Q4.
There is a high probability that, as the Nifty and Sensex recover, a number of investors are looking to increase their exposure to stocks once again. For all of them it is time to remember the basic reality of equity investing. When you buy a stock, you own a business. And like any other thing in life, every business has a risk. This is even more important when investing in small-caps. Why so?Small-caps have an inherent risk which is technical
ETMarkets.com
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