In my portfolio , I have only 3 small cap stocks
alkyl amines, KEI and Mold-Tek-Packaging, and even out of these , I am contemplating about selling alkyl amines, so I can safely say that my change of strategy has nothing to do with small cap companies performance. You are right, they will average out.
Rather I am not at all confident about finding good small cap companies which I can hold for very long time, without losing my capital. Precisely for that reason, I am investing in small cap through active small cap mutual funds. I am AMFI certified advisor from 2005. So i have seen the small cap mutual fund performance from last 18 years from close quarters, and I know these AMCs have resources to find such small companies and study them better. We dont have that much resources as well as reach to management. But of course, this is not the right time to invest in small cap funds. These funds themselves give us a hint to stop investing into them, when they stop Lumpsum investments and start accepting only through SIP. Going forward returns will revert to mean.
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