Big Profits from Small Stocks: How to Grow Your Investment Portfolio by Investing in Small Cap Companies

Many people are afraid to invest in small companies because they are more volatile and riskier than large companies. By limiting them to only large companies, they are bypassing huge profits that can be gained through investing in small companies. Statistic shows that investing in small companies have faired better in returns than large companies over time; thus the book recommends people to consider buying shares from small companies. However, a considerable amount of work and effort needs to be put into researching a profitable small company. If one finds a small company with strong fundamentals such as rising sales and income over time, book value per share significantly higher than market price per share, P/E ratio being low, products in demand, and intelligent managers then one should buy this stock. These are the mandatory analysis one needs to do if he or she desires to invest in small companies. If not, there will be a serious consequence of losing money and will discourage people to buy shares from small companies again. As information pointed above, it is obvious that the book provides relevant tips to use to analyze small companies but the only downfall is the book's lack of explanation on certain things and depth. However, it's a good starting read for people who are seriously getting into small companies.

I began my stock market investing with the purchase of small stocks. Back then, they were called penny stocks because some companies sold their stock for just a few cents a share. Later, penny stocks were any stocks selling for less than $3 or $5 or $10 a share. This book deals with how to make serious money from investing in small or start-up companies. Small companies appear to be where the action is, and where the profits are. I like this book. It gave me valuable hints on profiting with small companies. There is another book you must read if you are interested in this subject. Get a copy of MAKING DOLLARS WITH PENNIES: HOW THE SMALL INVESTOR CAN BEAT THE WIZARDS ON WALL STREET by R. Max Bowser. Bowser has been writing a top financial newsletter for twenty-five years. He monitors many promising small companies. He gives advice on what to buy, when to buy and when to sell. He gives monthly updates on the stocks he recommends. I refer to Bowser's book often.