What the Top Small Caps Can Do For You 

The top small capscan do two things for your portfolio. They offer you some diversity in your investments. They also allow you to become part of a rising enterprise.

You probably have a number of large cap stocks or some other conservative investment in your stock portfolio. These investments are good but you should always offset such investments with financial instruments from other sectors of the market. It is particularly useful to maintain a certain number of investments in stocks issued by smaller companies with lower market capitalizations.

The top small caps combine this lesser size with greater potential. Most large cap companies had to start out small. They worked their way up from small cap territory to the successful station that they inhabit today. Just imagine if you had invested in a small cap stock worth five dollars twenty years ago. Now the stock might be worth several hundred dollars per share. You would have received incredible returns over the years.

How to Identify the Top Small Caps 

The top small caps are much like other small cap stocks at first glance. They usually have somewhere between one and five billion dollars in market capitalization. Their stock prices will vary but they are not less than five dollars. You should not confuse the top small cap stocks with penny stocks. Small caps may be risky investments but they are not nearly as dubious as many penny stocks. All small caps are traded on the major stock exchanges and meet SEC requirements.

Take a closer look at these companies to find the top small caps. Investigate their fundamentals. If they are increasing earnings every year then they are showing signs that they may be the top small caps on the market.

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Why Top Small Cap Stocks Are a Good Choice

Investing in the top small cap stocks accomplishes two important tasks for you. This type of investment healthily diversifies your portfolio. It also gives you a chance to get involved with a stock that has a possibly bright future.

Everyone knows that you need to keep a diverse collection of investments in a portfolio. Too many large cap stocks will leave you with a boringly conservative set of investments that grudgingly makes returns. Too many small cap stocks would result in a high amount of risk and the potential for big losses. You need the right mixture of stocks in order to protect yourself from losses with large cap stocks while you maintain the opportunity of significant gains with a top small cap stocks.

That is the real attraction the top small cap stocks. Since the price of each share is generally low, you can buy a lot of shares. If you have only $10,000 to invest but you have to choose between a large cap stock and a top small cap stock, the difference in buying power is stark. You can buy 2,000 shares of a five dollar stock with that money. You can only buy 100 shares of a $100 stock. When these stocks experience similar upticks in price, you will earn a lot more with the top small cap stock.

Some of the Top Small Cap Stocks

•             Silver Standard Res

•             Myriad Genetics

•             Westlake Chemical Corp

•             Graftech Intl

•             Lincoln Electric

•             Allied Nevada Gold Corp

•             Nu Skin Enterprises Inc

•             Pan American Silver

•             Teradyne Inc

•             Reliance Steel & Aluminum

The stocks listed above are some of the top small cap stocks at present. They represent various sectors of the market, including precious metals, biotech and energy as well as some from more traditional sectors.. Look each of them up to find out more information and decide if you want to invest in these top small cap stocks.

What Is a Micro Cap Fund

It seems that the micro cap fund has become more popular than ever. While it was almost unheard of fifteen or twenty years ago, an increasing number of investors have been raking in huge returns with micro cap investments. While micro caps may be stepping into the limelight for the first time, however, they have been around as long as other types of exchange traded funds (ETF).

If you are hoping to claim your share of the micro cap profits, it is important that you first understand what micro caps are and how they work. Essentially, micro caps are regular ETF’s. They are traded on stock exchanges. They include a variety of types of funds such as bonds, currencies and commodities. What makes a micro cap different, however, is the size of the company it represents. Micro cap companies hold between $50 million and $250 million market capitalization. Because they have so little market capitalization, they do not usually meet the listing requirements for standard stock exchanges. Because of this, a micro cap fund is sold over the counter on the OTCBB or the Pink Sheets.

Micro Cap Fund: A Game of Balance

There are a few things you can do in order to get the most out of your micro cap fund investment. It is important that you thoroughly research the fund before you buy any shares. While micro caps can grow exponentially in value overnight, they can devalue just as quickly. The only way to ensure that you make a good decision is to make an informed decision.

It is also a good idea to buy in quantity. Although a micro cap’s low cost is one of its most attractive features, you will have to pay brokerage fees each time you buy more shares. Each investment should be large enough to justify the fees you are paying. In the end, however, the most important thing is to trust your own judgment. If you believe that you are investing in the right micro cap fund, you may soon see the returns of your dreams.

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What Are Small Cap Stocks to an Average Investors?

“What Are Small Cap Stocks?” is a question the beginning investor often poses to his or her stockbroker.  Trying to figure out all the different types of stocks can be a daunting task.  Many investors specialize in a specific area and focus all of the research there.  A savvy investor can often boost his or her own portfolio by diversifying his or her assets; taking advantage of small cap stocks is one way to increase the return on investment of the portfolio.

What Are Big Cap Stocks and What Are Small Cap Stocks?

The definition of different sizes of stocks is based off market capitalization; this is what “cap” is short for.  The market capitalization of a stock is what the market feels the company’s general worth is.  The amount that determines what are small cap stocks has changed over the years; currently the category low and high figure is approximately $300 million to $2 billion.  While that value seems rather high, the values for determining a big cap stock are $10 billion to $200 billion.  Learning what are small cap stocks will help determine level of risk.  The advantage of a small cap stock is that it has a decent chance to have a profits explosion and double or triple its worth.

The larger cap stocks do not have high percentage growth most of the time; they are often categorized as slow, but reliable growth. Slow, reliable growth is the definition of a low risk investment.  The low risk investments are used to hedge the high risk investments; these low risks keep a portfolio afloat when a high risk venture turns bad.  Deciding what are small cap stocks to invest in can be tough, but the profit potential is too good to pass up.

Understanding Small Caps ETF

Small caps ETF are special types of investment for more than one reason. ETF stands for exchange traded fund. These index investments are fairly recent opportunities for most investors. They were created in the 1990s. Small caps ETF are a type of ETF that consists of selections of companies with low market capitalizations.

An exchange-traded fund is similar to a mutual fund. It is essentially an index of stocks, commodities and bonds. When you buy a share of such a fund, you purchase a little of all the financial instruments included in its basket of investments. The value of your shares will track the performance of all these investments simultaneously.

Small caps ETF are funds that consist specifically of assortments of small cap stocks. Small cap stocks are issued by companies with market capitalizations of less than five billion dollars. AN ETF spreads out investment in these smaller companies in order to minimize exposure to the risk presented by smaller companies. These funds also offer investors the possibility of considerable gains that successful small cap stocks can make.

Investors in small caps ETF are usually trying to diversify their conservative portfolio with investments that have more potential for growth. Small cap stocks can always grow into large cap stocks but large cap and mega cap stocks are nearing the limit of their growth. A small caps ETF gives investors access to that kind of possible growth without leaving them vulnerable to the kinds of failures that are more common among small cap companies than among large caps.

Top Small Caps ETF

•             First Trust Small Cap Cor Alpha DEX Fund

•             India Small Cap ETF

•             Market Vectors Brazil Small-Cap

•             Powershares Dynamic Small Growth Portfolio Fund

•             Schwab International Small Cap-Equity

The above list shows just a handful of the hundreds of small caps ETF. They represent smaller companies from just about every sector of the market. Investigate each further before you make an investment decision about small caps ETF.

Agricultural Commodities ETF: The Seeds of a Good Investment

As good farmers know it is time to plant seeds for the coming year, good investors know it is time to buy shares of agricultural commodities ETF. After all, the two things are inextricably connected. Summer is the high season for the agricultural industry, but it is actually in late winter and early spring when everything starts. The seeds are planted, the fields are plowed and farmers lay the groundwork for another year’s successful crops. This is also the perfect time to lay groundwork for successful investment in the agriculture industry. Commodities such as corn, wheat and soy will not be on most investors’ radar for another few months and share prices are still low. Although it can be difficult to predict the weather or to judge how well the crops will grow, you can cut the risk of a bad investment by buying agricultural commodities ETF low now. If the crops fail, you will not lose much. If the crops thrive, you could earn enormous returns.

Agricultural Commodities ETF: A Booming Industry

Although there is risk associated with every investment, agricultural commodities ETF is a relatively safe investment. After all, the products of agriculture are used in almost every industry. Corn, soy and wheat can be found in almost every product sold on the supermarket shelves. Cotton is used to make a wide range of low and high-end clothing. Special processing plants are being used to turn the products of agriculture into everything from medicine to fuel to biodegradable plastic. Natural products are in and most of them come from agricultural commodities. Agriculture is a booming business and smart investors are jumping in early to take advantage of the boom. Investing in agricultural commodities ETF may be your key to success.

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A Micro Cap ETF can be Lucrative and Equally Risky

A micro cap ETF has some major draw factor if the investor is willing to do the research and accept the risks. Micro capitalization trading firms will typically index small, unknown companies and accordingly they have a high tendency to fail, file for bankruptcy or delist. This does not mean they will not reward a savvy investor with handsome returns. The common characteristics of micro cap ETFs are high risk, the ability to stay liquid and extreme volatility.

 The Nature of a Micro Cap ETF

The risk associated with small companies makes it unwise to own a too large or a controlling interest in them. For this reason, ETFs typically spread their investments over hundreds of companies in order to keep their assets small in the event they need to sell their holdings. Additionally, too much money from ETFs can cause a price disruption that would not occur in the larger cap indexes. The down side to spreading their assets thinly across many companies is a minimal gain from positively producing firms.

The very nature of the micro cap ETF class implies a constantly shifting security allocation. Companies regularly outgrow their status and move to the next class, while many more disappear altogether due to bankruptcy and delisting. This make for unsure investing while hinting at a promise of giant returns.

Micro cap equities can be extremely volatile, changing dramatically on a minute-by-minute basis. This is good news to the investor seeing double digit percentage growth in a matter of hours; however, the opposite scenario is just as possible, resulting in a crippling effect to an investment.

Every big risk should come with the potential of a big reward. While many investors turn to the micro cap ETF as a means of diversifying their portfolio and possibly generating a significant return for minimal capital, they put the bulk of their investments in medium or large cap ETFs for the security.

Metal ETF: Not Just Gold

When it comes to the phrase ”metal ETF,” investors have a tendency to focus their attention in two directions: Gold and silver. That means the most popular metal ETF on the market is the SPDR Gold Shares (NYSE: GLD). GLD isn’t just the largest and most heavily traded metal ETF, is also the second-largest ETF in the world of ANY kind.

Next, the metal ETF conversation will drift to GLD rivals such as the iShares Gold Trust (NYSE: IAU) or over to the major silver ETFs, the iShares Silver Trust (NYSE: SLV) and the ETFS Physical Silver Shares (NYSE: SIVR). And there would end the metal ETF discussion for investors not willing to look beyond the usual suspects. However, there’s much more to the metal ETF game than just gold and silver.

Metal ETFs: Beyond The Usual Suspects

Alright, so you know about the metal ETF that will get you involved with gold and you have a fund in mind for silver, but what about the other metals? If you’ve been wondering if there’s a metal ETF that offers exposure to other precious metals, you’re in luck thanks to the folks at ETF Securities. That firm offers the only ETFs backed by physical holdings of platinum and palladium, the ETFS Physical Platinum Shares (NYSE: PPLT) and the ETFS Physical Palladium Shares (NYSE: PALL).

If you demand more from your metal ETF, consider a basket fund. The ETFS Physical Precious Metals Basket Shares (NYSE: GLTR) offers exposure to gold, silver, platinum and palladium. The ETFS Physical White Metals Basket Shares (NYSE: WITE) is a metal ETF focusing on just silver, platinum and palladium.

Metal ETF: Not Just Precious Metals

The metal ETF universe isn’t limited to precious metals. There is a range of exchange-traded notes (ETNs) on the market whereby investors can trade industrial metals such as aluminum, copper, lead, nickel and zinc. Many of these funds are thinly traded, so they may not be suitable for some investors. Check with your financial advisor and do your own homework before deciding which metal ETF belongs in your portfolio.

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Use This ETF Guide To Get Started In ETFs

If the statistics are any indication, plenty of investors and financial advisors could use an ETF guide. After all, arguably the most important asset class of the last 30 years (maybe longer) still remains unknown and underutilized by scores of investors. Fortunately, you don’t need to spend a lot of money on an ETF guide. We’ve got a basic, yet potent ETF guide for you right here.

Even a basic ETF guide such as this one can give you a leg up one your own broker or financial planner. For starters, no ETF guide would be complete without ensuring that rookie ETF investors know that ETFs hold myriad advantages over mutual funds. If you take anything away from this ETF guide, know that ETFs are vastly superior to mutual funds when it comes to costs and liquidity. Not to mention, there are tax advantages with ETFs. With mutual funds, there could be punitive tax consequences.

ETF Guide For The Biggest Funds

If you’re looking for the 10 largest equity-based ETFs, this ETF guide will give them to you right here: Vanguard MSCI Emerging Markets ETF (NYSE: VW), SPDR S&P 500 (NYSE: SPY), SPDR Dow Jones (NYSE: DIA), PowerShares QQQ (Nasdaq: QQQ), Vanguard Total Stock Market Index Fund (NYSE: VTI), iShares S&P 500 Index Fund (NYSE: IVV), iShares Russell 2000 Index Fund (NYSE: IWW), iShares Russell 1000 Value Index Fund (NYSE: IWD), iShares Russell 1000 Growth Index Fund (NYSE: IWF) and the iShares MSCI EAFE Index Fund (NYSE: EFA).

When it comes to precious metals, this ETF guide advocates focusing on the SPDR Gold Shares (NYSE: GLD), the iShares Silver Trust (NYSE: SLV) and the ETFS Physical Palladium Shares (NYSE: PALL).

For the purposes of a brief ETF guide, we won’t listen too many bond ETFs because we could be here for days, but here are a few you should know: Vanguard Total Bond Market ETF (NYSE: BND), the iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) and the Pimco Enhanced Short Maturity Strategy ETF (NYSE: MINT).

ETF Guide To Sectors And Emerging Markets

When it comes to emerging markets, any ETF guide should tell you if a you’re new to ETFs, don’t limit your horizons to just Brazil and China or ETFs like the Vanguard MSCI Emerging Markets ETF (NYSE: VWO). There is an expansive universe of emerging markets ETFs out there that offer exposure to countries such as Chile, Colombia, Malaysia, Peru, Russia, Thailand and Vietnam and that’s just to name a few.

Same things goes for sector ETFs. Another important take away from this ETF guide should be don’t put all your eggs in the baskets of financials, technology and consumer staples when there are so many more sectors out there to take advantage of. In other words, let this ETF guide tell you there is something to be said for more obscure sector funds.

More Than Just The Dollar, Euro When It Comes To Currency ETFs

Over the past few years, foreign exchange, or “forex,” trading has become more and more popular as an asset class previously reserved for central banks and professional trades has made its way into the everyday investment lexicon. While forex trading has become popular, that doesn’t diminish the substantial risks involved in trading this asset class and it speaks to a secret weapon investors should consider: Currency ETFs.

The premise behind a currency ETF is a simple one: Help investors gain access to non-dollar assets without dealing with volatile swings of intraday currency trading. Best of all, we’re in the ideal environment to take a long, hard look at a currency ETF or two. In terms of purchasing power, the U.S. dollar has been a losing streak that is now into its fourth deacade.

Historically low interest rates mean the dollar’s strength isn’t likely to increase anytime soon and with everything that is going in Europe, this isn’t the best time to consider the Euro. However, there are plenty of valid currency ETF options to consider.

Currency ETF: The Best of the Best

Excluding the U.S. dollar, there are two other major currencies that have what is known as “safe haven” status: The Japanese Yen and the Swiss Franc. Both Japan and Switzerland are export-driven economies, so a strong currency isn’t great for stocks in those countries, but it’s good news for investors looking for alternatives behind the greenback or euro. The currency ETF plays here are the CurrencyShares Swiss Franc Trust (NYSE: FXF) and the CurrencyShares Japanese Yen Trust (NYSE: FXY).

If you want a little more risk in your currency ETF, try the CurrencyShares British Pound Sterling Trust (NYSE: FXB) on for size. And if you want a currency ETF that also has the added benefit of being a play on commodities prices, try the CurrencyShares Australian Dollar Trust (NYSE: FXA), which historically moves higher when gold rises. Another option on this front is the CurrencyShares Canadian Dollar Trust (NYSE: FXC), which gets a lift from higher oil prices.

More Obscure Currency ETFs To Consider

If you want some emerging markets exposure in your currency ETF, try the WisdomTree Dreyfus Emerging Currency ETF (NYSE: CEW) on for size. CEW offers exposure to the Mexican Peso, Brazilian Real, Chilean Peso, South African Rand, Polish Zloty, Israeli Shekel, Turkish New Lira, Chinese Yuan, South Korean Won, Taiwanese Dollar, and Indian Rupee.

For those looking to keep it conservative with their currency ETF while still getting multi-country exposure, try the PowerShares DB G10 Currency Harvest (NYSE: DBV). DBV currently tracks U.S. Dollars, Euros, Japanese Yen, Canadian Dollars, Swiss Francs, British Pounds, Australian Dollars, New Zealand Dollars, Norwegian Krone and Swedish Krona.

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