Although often volatile, you can
find small cap growth stocks with strong long - term investing potential.
Not exact matches
Research in finance has aggregated together cross-listed and non-cross-listed
stocks and
finds that, on average, value
stocks outperform
growth stocks,
small cap stocks outperform large
cap stocks, low liquidity
stocks outperform large liquidity
stocks and low volatility
stocks outperform high volatility
stocks.
Ned Davis
found that using different investment approaches to
find growth stocks, value
stocks,
small cap stocks, international
stocks, dividend
stocks, etc. produced the best performance results, and my experience agrees with his
findings.
In 1992, the Fama - French three factor model (market risk, size and value)
found that both the size (
small vs large
cap) and book - to - market equity (value vs
growth) factors deliver a higher risk - adjusted return in NYSE
stocks, and thus the model adjusts for the outperformance of size and value when valuing a
stock.