AS a rule, analysts rarely recommend small-cap stocks. They are fraught with dangers because of several factors. Low trading volumes, and high promoters’ holdings, imply that they are amenable to volatility risks, and quick and easy manipulations. Most of them are lowly-priced and derided as “penny stocks”. In times of a rally, like we have seen over the past several months, unscrupulous promoters influence stock prices to raise capital, and quietly vanish from the scene.
But, at the same time, if investors choose carefully and cautiously, small-caps hold great growth opportunities. More importantly, as we begin 2021, several experts seem gung-ho about these shares. “We expect small-caps to outperform the others in 2021,” says a confident Satish Kumar, Head (Equities), Equirus Securities. S Ranganathan, Head (Research), LKP Securities, adds, “It is the small-cap space that has a lot of catching up to do with its (mid-cap and) large-cap counterparts.”
When one looks at the respective indices, the Nifty and Sensex, which comprise larger stocks, scaled historic highs last year. The Nifty Mid-Cap 100 hit the 21,000 mark for the first time since January 2018. Its deviation from the large-cap indices narrowed down to 1.7 percent.
However, as Kumar explains, the index for the smaller stocks is “still underperforming by almost 29 per cent”. Hence, he believes that there is a “big catch-up trade in this space”.
Esta historia es de la edición January 2021 de Outlook Money.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición January 2021 de Outlook Money.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
Tax Reforms: What's In Store?
The government is working on reforming the existing Income-tax Act, 1961. The impending reforms have raised many questions in the minds of taxpayers. Will the old regime and deductions be done away with? Will it really simplify your life? What's the need for these reforms? We try to answer these and other questions regarding tax reforms
5 Questions That Will Lead You To The Right Financial Planner
Choosing a financial planner is not as easy as it may seem. Besides the right credentials, you should also consider things like the kind of services you will be needing-tax advisory, estate planning-as well as the fee structure. Here are five questions that will help you choose the right planner
Health Insurance Sub-Limits
Sub-limits in health insurance are restrictions placed by the insurance company on the SP maximum amount they will pay for specific expenses that are part of the total hospital bill.
Delayed Gratification, Humility, Understanding Inflation And Risks Key To Financial Success
The journey to financial success is continuous, requiring patience, education, and disciplined decision-making.
Avoiding Common Pitfalls through Asset Allocation and Multi-Asset Investing
Just as you track the calories and nutrients for a well-balanced diet, you need a balanced portfolio that has multiple assets to balance the risks and returns.
Mutual Funds for Financial Growth
Mutual funds allow you to invest in small amounts and seize the compounding growth, and experts help tackle volatility and asset allocation, making them a potent tool to create wealth.
Multi-Asset Investing is The Financial Equivalent of A Well-Balanced Diet
Just as you track the calories and nutrients for a well-balanced diet, you need a balanced portfolio that has multiple assets to balance the risks and returns.
Theme and Triumph: How Thematic Funds Can Boost Your Bottom Line
Thematic funds target high-growth opportunities in various industries and economic sectors, allowing investors to participate in future-focused segments to generate long-term returns.
Wealth Creation Through SIP - The Slow & Steady Road to Success
For investors seeking to create long-term wealth, SIPS are a powerful tool that enables regular, disciplined investments to generate compounding returns.
Tuition Fee Varies Among Countries
I am 22 years old and have recently started working in a software company.