Start building up a portfolio of shares over time. The stock market is one of the biggest generators of wealth around.
You can structure your portolio:
Build a core of 5 to 6 large holidings in stable businesses
Small Caps are great for diversification. Add exposure to different risks and industries.
Grow your wealth with fast growth Small Caps
Accelerate with ASX Small Caps. With over 2,000 stocks to choose from, let us do the hard work for you. With our research, turn $1,000 into ….
Turn
$1000
Into:
These should be quality companies. We have many examples of both Small Caps and Blue Chips that are stable businesses. Don’t ignore Small Caps in this space. A lot of little companies are excellent quality businesses.
The most important step is to start building an asset base. A good start is to build 5 or 6 large positions in companies that are substantial operating businesses.
Substantial businesses mean they are able to be valued by fundamental investment criteria, and most will pay dividends.
Each day you should ask yourself: would I buy this stock today?
2. Each stock is 5-6% of your portfolio
Your positions should be relatively large in the context of the portfolio, ranging from 5%-8% maximum of the total portfolio at current prices.
3. Buy Quality Companies
We have many examples of both Small Caps and Blue Chips that are stable businesses.
Don’t ignore Small Caps in this space. A lot of little companies are excellent quality businesses.
4. A Tier 1 Stock in our Portfolio
Our Small Cap Portfolio holds aluminium product manufacturer Capral (CAA), the telecommunications group Symbio (SYM) formerly MNF Limited (MNF). We won’t give all our Tier 1 stocks away here!
Founded in 2011.
Average return on all 300 Small Caps
Stocks Taken Over
These stocks have surpassed their price targets, and our analysts expect continued bullish performance.
This is the area where the pruning generally occurs. Don’t be afraid to sell a stock.
The hope is that they grow into larger positions, we have over 100 stocks we cover across a broad range of sectors and risk profiles.
Some stocks in tier 2 should give exposure to different risks for your portfolio, not reflected in the Core. For example you may like stocks that give you US$ 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.
Power in Small Caps
These stocks can really grow! You never know your luck and these small companies can grow into stable Tier 2 businesses. Small Caps
Each stock is only 0.5% of your portfolio
We have to be readily prepared to lose that sort of money with no regrets. Nobody, not even Warren Buffett or [INSERT THE NAME OF YOUR MOST ADMIRED INVESTOR HERE], gets them all right, even in bull markets.
Don’t invest too much at the start
One key to making money is minimising your losses, which means not investing too much initially. Don’t know how much to invest or how to start? It’s time to follow our investing pathway in Building Wealth From Scratch In the Stock Market. Start with your CORE plan today.
Reduce your risk
A successful investment portfolio is by definition one where your mistakes aren’t big enough to damage below the waterline. We have risk ratings on all our Small Cap stocks to help you manage your risk profile.
Grow your confidence
What am I aiming for with Small Caps?
You want two or three winners, which are currently small companies (or Small Caps), but which have the capacity to become much bigger.
The flip side is that you will have two or three poor performers. The key here is that your losses are limited, but your gains are not.
With smaller positions you can start to build up as your confidence in a stock grows.
New industries
Build up exposure to newer industries, and emerging business models. From our Dashboard you can see each sector and our favourite stocks to buy.
It’s worth pointing out that timing is difficult to perfect. In fact, impossible. Regular readers know that I like to Buy slowly, and if, like Hansen Technologies (HSN) the stock moves quite fast, we may not want to chase the price.
Under the Radar Report Portfolio Manager.
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.
