Small-cap value stocks stand out as one of the top ways to anchor a long-term portfolio. We all know that small-caps outperform their large-cap cousins over a sufficiently long horizon. The reasoning is obvious – small-caps have more room to grow than bigger stocks, and given enough time, their growth compounds more than mega-caps.
But investors often look toward small-cap growth stocks, which isn’t a bad call generally. Small-cap growth stocks offer the exact growth upside that the investment thesis hinges upon. But solely focusing on growth is a mistake – you overexpose yourself to volatility and risk while missing out on a slew of benefits (including dividends) that usually come with small-cap value stocks like the ones on this list.
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