Small or Smaller?: A breakdown of Small-Cap and Micro-Cap Stocks

The subprime mortgage crisis has left the American financial landscape scarred, and sent shivers across the financial world here and abroad. But there is a wealth of lessons to be mined from this experience, which hopefully will shape the financial literacy of the American public for years to come.

Even with the U.S. slowly recovering from the trauma, there are still signs that it will be a long and difficult road ahead. For one, credit is getting tighter, and it should be, because that was where the problem started. Cash is equally getting tighter, as more and more households realize they can live without expenditures they thought necessary for survival. Households are always on the lookout for anything that could help them save or slash bills. With unemployment rates still beyond acceptable rates, there is a growing guardedness of every penny saved, and growing vigilance of every penny spent. While there are a multitude of options to earn tidy profits from small and relatively low-risk investment options, it is quite understandable that it may be harder than ever to convince them of any get-rich-quick schemes or even sound investment offers for that matter.

There is a way, however, to address this trepidation. People are afraid to jump onboard with any project they know very little of. This means that education is key. When buyers know what they are in for, without surprises or stipulations in fine print, they are more likely to reconsider the product. It is all about laying it to them in black and white, so they may make informed choices about matters that will bring about their desired effects.
OTCSHUB keeps this in mind. That’s why we only bring you information that clarifies, not confuses.

So, if you have stashed something extra that is just sitting around the house gathering dust, why not get it to work for you? With time and patience, and a generous dose of free information to guide you on which investment packages make sound choices, you can earn a little bit more without flexing a muscle. We only ask you to keep your eyes open.

In many investment decisions, you'll want to start small. OCTSHUB offers information on small cap shares and micro cap stocks. These are shares sold to the public from companies whose capitalization does not exceed $1 billion and $100 million, respectively. More specifically, and depending on various brokerage houses’ definition of “small” and “micro,” small cap shares are publicly traded certificates of ownership of companies with capitalization between $100 million to $1 billion. A micro-cap stock, on the other hand, is a certificate of ownership of a company with capitalization between $10 million and $100 million. Both categories are seldom listed in the stock market because of lack of readily available information. Information is not readily at hand because few stock and investment analysts work in this sphere, preferring to work in bigger markets that specialize in mid-cap to mega-cap shares (with capitalizations starting at $1 billion to over $100 billion). This is where OTCSHUB comes in, providing information on companies that the big players overlook.

While starting in the micro-cap market is something you can do over the counter as micro-cap stocks tend to be priced attractively, the investor should keep in mind that the majority of businesses in this area are start-up companies, with products yet to be tested in the market. This is a high-risk market category, because companies belonging in this segment have yet to build public perception of their trustworthiness, which in turn will equate to higher capitalization as more and more public investors “vote” with their shares.

Small-cap stocks are issued by companies that have been around for a while, and have already built a track record over a length of time. They are less volatile than the micro-cap stocks, and the Securities and Exchange Commission (SEC) requires them to file reports when a) it has 500 or more investors, and b) when it has net assets more than $10 million. For the stocks to be registered with SEC, they have to be listed in one the following major stock markets: New York Stock Exchange, Nasdaq Stock Exchange and American Stock Exchange, to name a few. Capital shares are priced higher than micro-cap shares, but the margin of risk is diminished. Small caps stocks are ideal for intermediate investors.

So where to trade? If you want to take on risks aggressively, micro cap stocks are a way to go. But if you want to tread lightly, you can shell out a bit more and go for the time-tested small cap market.

We help you in your success OTCSHUB is a financial marketing firm that specializes in assisting the underserved Micro-cap and Small-cap stock community. Many of these entities lack the recognition required to raise the resources needed to increase equity appreciation and liquidity. This community has traditionally been shunned by Wall Street Institutions and has been forced to look elsewhere for exposure. http://www.otcshub.com/