15 Best Micro-Cap Stocks to Buy Now
A micro-cap stock has a market capitalization between $50 million to $1 billion. Micro-cap stocks have higher risks amid low liquidity and lack of assets. Most of these stocks are early growth-stage companies that are more vulnerable to problems arising both internally and externally. They tend to burn through cash quickly, losing to their counterparts due to financial instability. Despite this, most investors include these stocks in their portfolio as they offer the potential for higher rewards.
Investing in micro-cap stocks during an economic recession can offer unlimited growth potential with long-term sustainability as these companies often focus on long-term projects. For instance, from January 2008 to January 2018, the Dow Jones Select Micro-Cap Index returned an annualized 11.6% while the S&P 500 returned an annualized 10.37%. The Russel 2000 micro-cap stocks index has recovered more than 8% since the start of January 2021, which outperfor