How much small cap in portfolio

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Market Classroom. Stock Watch. Market Calendar. Stock Price Quotes. Markets Data. Market Moguls. Expert Views. Technicals Technical Chart. Commodities Views News. Forex Forex News. Currency Converter. Rate Story. Font Size Abc Small. Small-Cap funds are a barometer of a recovering economy since these stocks tend to gain more traction in a high liquidity situation in the market.

As per a Delhi-based financial planner and mutual fund analyst who wishes to remain anonymous, one of the major flipsides of small-cap funds is the lack of transparency in the management structure of small-cap companies.

Simply Save Know how to deal with unfair claim rejection. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express writtern permission of moneycontrol. Access event featuring 12 Days 12 Strategies 12 Experts Rs. Register Now! Do you have small-cap funds in your portfolio?

Now's the time to get some Small-Cap funds are a barometer of a recovering economy since these stocks tend to gain more traction in a high liquidity situation in the market. Ira Puranik. Related stories. They can be volatile, and some mid-cap companies fail. But they also can experience explosive growth. Consider how to add that growth potential to your portfolio. To choose a percentage of your investments for mid-cap stocks, first decide how you will divide your overall portfolio.

You might consider stocks as your largest money commitment, while looking at bonds and cash as a haven for a smaller percentage of your allocation. This gives you stocks' opportunity for growth, and the relative safety of bonds and cash. Consider some allocation models that spread out your risk. You could put 60 percent in stocks and 40 percent in bonds and cash.

If you can tolerate more risk, consider 75 percent in stocks and 25 percent in bonds and cash. Note that even an aggressive allocation reserves some of your portfolio for safer investments. Once you have chosen a percentage for stocks, break your stock category down even further.

You can start with 50 percent of your stocks in large-caps, 30 percent in mid-caps, 20 percent in small-caps.