Yet, investing in small-cap companies is riskier than investing in large-cap companies. Investing in small-cap stocks, especially during a global pandemic, offers huge growth potential while still ensuring long-term viability since these businesses typically concentrate on long-term ventures. The S&P Small Cap 600 Index has gained 78.27% over the past twelve months, compared to the 65.27% for the S&P 500 Index. The Russell 2000 index of small-cap stocks has gained 70.85% in the last year, compared to 44.5% for the large-cap S&P 500 index. Small-cap stocks are gaining momentum as optimism for the post-pandemic economy grows. Small-cap outperformance also indicates that the bull market is only in its early stages.ĭue to the uncertainty caused by the pandemic, investors appear to be interested in investing in stocks that are undervalued compared to their earning potential. The success of small-cap companies is often used as an indicator of the duration of a bull market, according to Wells Fargo & Company (NYSE: WFC ) senior investment strategist Brian Jacobsen. In this environment, small-cap stocks are gaining the attention of the Wall Street. Investors remain optimistic about the steady recovery of the economy, backed by mass rollouts of COVID-19 vaccinations and stimulus checks to undo the financial impact of the pandemic.

Micro cap stocks 2017