There is a consensus that most of the money in the entire market revolves around small-cap stocks, which are the most popular among retail stock investors. So what exactly is the situation that causes retail investors to love small-cap stocks so much? The main reasons include the following.
First, in the eyes of small retail investors, stocks are used for speculation, not investment, if a stock is too big, then it is not easy to speculate, large-cap stocks to speculate, it takes a lot of money to pull up the price of the stock. For example, 10 million circulation of the stock and 10 billion circulation of the stock to compare, the same is up 1 yuan, up how much money is needed for everyone can see.
Second, many retail investors come into the stock market speculation is to make quick money. The smaller the plate, the smaller the stock, the price is easy to manipulate, volatile, up or down quickly, to have the opportunity to eat the spread. But on the contrary, we all know that the large-cap stocks are almost up is very small, but the decline is also limited, for the ups and downs of small-cap stocks, to meet the criteria of retail speculation to make quick money.
Third, the plate of small stocks belong to small and medium-sized enterprises, the performance of these small and medium-sized enterprises is more volatile, more suitable for speculation. For example, many small and medium-sized enterprises due to poor business to improve performance or within the significant good, the stock price and soaring, so these small-cap stocks receive a variety of pursuit.
In general, whether it is a bull market or bear market, when it comes to stock gains, basically large-cap stocks are no way to compare with small-cap stocks, love to invest in small-cap stocks which are the choice of small retail investors only.
For the big money, they will still choose large-cap stocks, because small-cap stocks can not accommodate so much money, and small-cap stocks itself company texture is not good, if there is a lot of money, the pursuit is not only the income, the safety of the funds is more important.
So, whether to choose large-cap stocks or small-cap stocks or according to their own economic strength and investment preferences to decide.