The current market has seen the small caps plunged to a 20% down from ATH(All time high)
Small Cap – These are the stocks which rank from 250th to the smallest company in ranking of “Market Cap”
Market Cap – It’s the total sum of the count of shares issued by a company multiplied by the value(current) of share or share price.
Story Continues –
So it happened that the small caps ruled the market from the great fall of March 2020 during the pandemic and since then some of them grew to levels of 100 PE (means their value was 100 times their earnings) which means they were overvalued by almost hundred times.
Now the “bears” have officially taken over the small caps and a rule of almost 4 years comes to an end.
Small caps are great value for money once they are at a fair price.
Disclaimer :
“This information is for educational purposes only and does not constitute financial advice. Investing in equities involves significant risk, and past performance is not indicative of future results. Always conduct your own research and consult with a financial advisor before making any investment decisions.”.