Today we have a really great guest for you on the show. He is Jeffrey Ingraham, Vice President of Consultant Relations and a Portfolio Strategist at Manning and Napier. Today he talks about a really important topic for investors, one that a lot of people don't really think about- Small Cap Stocks. A stock is generally classified as small if it has market capitalisation between three hundred million and two billion. If you're wondering what market capitalisation is, it's really quite simple- it's the number of shares outstanding in a stock, multiplied by the share price, so it's basically the value. Listen in to find out what Jeff has to tell you about Small Cap Stocks.
Jeff has a really deep knowledge about this particular asset class. He's written a blog post, called Three Reasons To Invest In International Small Cap Equities, where he has cited three reasons to do so and these are: historical outperformance, growth opportunities at attractive evaluations and portfolio diversification. Listen in now, as Jeff discusses these three good reasons for investing in Small Cap Stocks.
- Jeff explains the value in diversification.
- Jeff explains why US investors diversified to begin with, should consider investing in Small Caps, outside of the US.
- Jeff's take on owning both US and international investments.
- Jeff discusses International Small Caps- an asset class that a lot of US investors don't even realise exist.
- The importance of understanding how asset classes interact with each other.
- The reason that you don't get true diversification by investing in the larger companies which are located outside of the US, anymore.
- How to retain the less correlated asset classes with better diversification potential, by investing in International Small Caps.
- You may have to sometimes invest in things which are unfamiliar to you, in order to get some diversification.
- Getting comfortable with the idea of the type of business that you're investing in, rather than the name.
- The consistent historical outperformance of Small Caps.
- Jeff explains why the Small Caps have consistently outperformed.
- Jeff discusses the growth rates of emerging markets.
- Spreading your risks vs picking your stocks, within an asset class.
- Jeff explains why the valuations on some of the International Small Caps are attractive.
Jeff's website: www.manning-napier.com