SHARETIPSINFO >> Articles Directory >> Small Cap And Big Cap Investing In Indian Stock Market


When you invest in a stock market, you should be very specific in choosing the stocks so that you can get the best returns out of your investment. There are different types of investing in the stock market. There are small cap and big cap investing in the market. So let us have a look at these types of investments in the Indian stock market.

About Small Cap Investing

It is estimated that small cap investing has a higher returns than high cap investing. Suppose a company is small, then a few millions of additional sales may contribute to explosive growth in earning. So what do you think about its risk in the stock market? Well during the first five years almost 80% of all new businesses will fail but it might involve about half of the publicly traded companies. Investing in small cap relies on the fundamental analysis rather than technical analysis. In small cap companies, you will not find stability of larger companies.

Small cap investments are generally good for short term investments.  So, if you wish to invest in a company for short term benefits, then you can always go this type of investments. If you are new to the stock market, then it would be very risky for you if you for small cap investment. You need to understand how it actually works in the market. You should however focus on how soon you can maximize your cash in the stock market. If you think that you do not want to lose your money in the stock market then it is very important to know every bit of the stock market as a whole where you can be quite sure of your investments in the market. So, you need to think well before you act as a small mistake committed by you can lead you to huge losses in the market.

Now coming to investing in small-cap stocks, they are something that are not included in mutual funds. So this is the main reason why small stocks get least interest to large institutional investment companies. Individual investors a very good advantage to buy stocks of promising companies before they rise or grow in the stock market. Do you know the reason why? It is because of the lack of interest by large institutions. Now do you know why small-cap stocks have become very popular in the stock market? This is because small investing has a higher return than high cap investing. It also relies on the fundamental analysis rather than technical analysis

About Big Cap Investing

We have learnt enough about small-cap stocks, right? Now we will come to the big-cap stocks. Now do you have any idea about the risk involved in big-cap investing? When we say about the risk in big cap stock investing, then the risk associated in this type of investment is very low. The risk percentage for this type of investment is low as 10-20%. So, it should be your decision whether you wish to go for this type of investment for your better profit. But when you decide to take big cap investing, then it is very important that you consult a good person who is well experienced in the market. So, you have to be very specific when you wish to go for high-cap stocks. It is always better to refer some of the experts and also go online for some studies on the stock market. You need to know every concept of the stock market because there are so many things that one should need to know when one invests in the stock market. You should be familiar with concepts like NSE, BSE, NASDAQ..etc. Not only this you have to know the functions of all these in the stock market. So, it is always advisable to sit on your computer and surf the Internet so that you can get good idea of the functioning of the stock market as a whole.


It is very important that you approach for a good stock market consultancy where you can be guided which type of investment would suit you according to your budget. They are the best person who would help you to make good decisions about the stock market. They help you to choose the best stocks available in the market and they would help you to give you more idea when and how to invest in the stocks. Do not dare to invest in the market only because your friends have suggested in doing so. This is the worst mistake that most investors make.  You need to be very practical and also you need to focus your goals whether you wish to go for short term investment or long term investment. So make a good research of the small cap and big cap investing when you wish to invest in the stock market.


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