Small-cap equities: Signs of life despite a lumbering economy
June 25, 2013
Equity markets have witnessed a strong run-up thus far in 2013, and small-caps are no exception. Christopher S. Beck takes you through his views on recent developments in the small-cap market, discussing positive indicators that include:
- Healthy balance sheets
- Dividend growth
- Share buybacks
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Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies.
Value investing focuses on buying stocks that are trading at bargain prices based on fundamental analysis, then holding them until they become fully valued. Typically, value investors select securities with lower than average price-to-book or price-to-earnings ratios and/or high dividend yields.
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The Russell 2000 Value Index measures the performance of the small-cap value segment of the U.S. equity universe. It includes those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.
The Dow Jones Industrial Average is an often-quoted market indicator that comprises 30 widely held blue-chip stocks.
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