In our Small Cap portfolio we have 8 medium sized positions, which serve varied roles.

It’s competitive!

This is the area where the pruning generally occurs. Don’t be afraid to sell a stock.

Buy some stocks for forecast growth

The hope is that they grow into larger positions, we have over 100 stocks we cover across a broad range of sectors and risk profiles.

Check your Diversification

Some stocks in tier 2 should give exposure to different risks for your portfolio, not reflected in the Core. For example you may like stocks that give you US$ exposure, or a small cap financial stock for alternative investment exposure, and a quality Small Cap miner.

Investment Themes

Some stocks will have greater exposure to cyclical themes; while others are selected to offer good value, which can include paying substantial dividends.

Any investment requires review. Even money stuck in a bank account! Are you getting the best interest rate you can get?

Our advice is to review, review, review any asset you hold! Make your money work for you!

No investing is risk-free and you can’t guarantee that the first stock you pick will shoot the lights out. Through diversification you can reduce your risk and with Small Caps you can buy diversity cheaply.

Liquidity is a factor in entry and exiting Small Cap stocks. Buy slowly to mitigate liquidity factors. To be cautious, you buy only 10-20% of your anticipated holding to start with, and then you wait. For example, if you plan to invest $2,000 in a stock, you can start and buy $400 worth of shares. Patience is the key

Your investment risk profile will help you choose the Small Cap stocks that are right for you. Seek independent financial advice and regularly review your financial goals.

“One of our key mantras is that subscribers should buy cheap and be patient.”

We hunt for cheap Small Cap stocks as buying as cheap as you can will protect your portfolio risk.

50% of our Small Caps pay dividends. In a portfolio context, dividends help to pay fees, taxes and provide a tangible return on your money. Stocks that don’t pay a dividend, are 100% growth investments. This is not a bad thing, but there is more risk.

If a big % of your portfolio is in a small cap, it is often best to take some profits early. It is always best to anticipate news, rather than react to it. This is easier said than done, but if you are reacting to the news, then essentially it’s too late. The bigger your share holding the more important it is to anticipate news.

Holding shares for a year may make the most sense, because your capital gains tax exposure will be reduced. Please seek independent tax advice.