Friday, 11 April 2014

The Increasing Scope of Small Cap Stocks Research


Let's Begin with a Research Update


In the second week of March 2014, an update came out on a news website that a stock
market research firm has released research on a Canada-based OTC stock. The firm specializes in small-cap stocks, and it aims to provide integrated communication services to investors through a user-friendly interface. This is indeed an encouraging trend, and will help users as they will find it easier to do necessary research on specific stocks.

Why Research is Important for Investors
This is a crucial question, and one of the fundamental needs for a good small- or micro-cap investment. Making hasty investments for short-term gain can lead to losses. Ill-advised investments without doing adequate research often turn out to be a financial disaster. In addition to that, getting lured by micro-cap scams that make big promises is one of the worst financial decisions that investors can make.

Apart from the fake stocks, sometimes even legitimate investments can burn investors' money. This happens due to a lack of research that would have exposed the weak links of some specific companies. The company insiders who operate such stocks often take unethical tactics to manipulate stock prices. This in turn, affects investors as they may end up losing their money. Many of these investments happen in the small-cap market where millions of dollars can disappear in a matter of a few days.

Lessons to Learn
Investors who might have got into traps of criminal investments before, or those who are looking to invest in small-caps, there are few things to learn from past experiences. They need to avoid investing in pump and dump schemes that make promises which are too good to be true. Also, putting money in stocks that are surging rapidly may not sustain for long. Recently, the Financial Industry Regulatory Authority (FINRA) has issued a warning for all the investors and traders who are following marijuana small-cap stocks as many features associated with these stocks are suspicious. Many of these stocks can eventually prove to be scams. Both newbies and seasoned investors need to consider these factors and carry out thorough background checks on the stocks they want to buy.

Be Inquisitive and Explore
More and more research firms are launching new and innovative websites for potential investors. These sites provide latest stock picks, news, market trends, and interesting updates on various organizations. Many of these portals focus on small-cap stocks, and how they are performing. Members of these websites also have access to extensive lists of equity research firms from where they can get research updates on various domains. So, you can now become more aware of the market and do your own research.

No comments:

Post a comment