Look at Rigel Pharmaceuticals (Nasdaq: RIGL). It was trading at $0.64 on June 13, 2022. Nine days later, the stock had doubled. Tiny Blue Dolphin Energy (OTC: BDCO) was trading at $0.39 on May 10, 2022. Less than a month later, it hit $2.38. And Trevi Therapeutics (Nasdaq: TRVI) was at $0.46 in February 2022. Less than two months later, it tagged a high of $3.73. That's the kind of action most people who get involved in microcap stocks are looking for. And there's nothing wrong with that as long as you know the risks and position size accordingly. Many investors don't know this, but you can also find microcaps that pay dividends. For example, Kimbell Royalty Partners (NYSE: KRP) has a market cap of just $1 billion and yields more than 12%. And $58 million market cap Crown Crafts (Nasdaq: CRWS) sports a 5.6% yield. Microcaps don't have to be startups that have recently gone public or are involved in Bitcoin or some other speculative technology. Crown Crafts makes baby furniture and has been around for 66 years. I tell investors that when creating a portfolio, they should diversify into various sectors, geographies and market caps. There are times when large cap companies outperform and other times when small cap or microcap companies are better. No doubt, my buddy was looking for one of those microcaps about to take off. Everybody is. And it's okay to invest in these types of companies. In fact, I recommend that investors include microcaps in their portfolios to have exposure to these small companies that can double or triple in a short period of time in some cases and fly under the radar in others. Just be sure you know why you're buying a stock and have an exit plan, like a stop, set up ahead of time. Ensure that you will sell if things change or grab profits when it's time. These small stocks can be volatile, and you don't want to be wondering what to do as the stock is bouncing all around. Good investing, Marc P.S. Small stocks - like penny stocks - can be hugely beneficial... if you know how to play them right. That's why I filmed the Penny Options Summit... Penny stocks have a role in your portfolio. Let me show you the best way I've learned to utilize them. Tune in here. |
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