The reason is the carnage in stock prices of many well-known small and mid cap companies. Individual small and mid cap stocks are touching 52-week lows every other day and individual damage to most of the stocks in this category is to the tune of 50-60%, some even more than that. Such severe and fast erosion of capital in small and mid caps have butchered investors conviction towards this category. Retail investors have taken the back foot and lost their faith and conviction towards investing in small and mid caps due to existing pain in their portfolios.
We have been saying this time and again - don’t try to time the market. We firmly believe that to get the best returns in the long term, investors should invest in a staggered and disciplined manner irrespective of market conditions. Investing through ups and downs of the market lets your investment grow and averages the purchasing cost. Equity investment is a serious business meant for long term investors. Trying to get in when the market goes up and getting out when there is a correction does not help you to create wealth.
Have you also stopped investing in small & mid caps and made up your mind to sell your stocks holdings once the prices recover in future? If your answer is yes, you are committing a bigger mistake now. Do not allow your emotions to take control of your equity investment decisions, instead inculcate habit of investing in discipline manner.
In fact, we are quite excited about opportunities emerging in small and mid cap space during this year. You may argue that most of small and mid caps have wiped out your hard earned gains over last couple of years. In fact those who invested in small caps over last 1 to 2 years are sitting on significantly higher losses and may be thinking to stay away from them.
However, we beg to differ. We firmly believe that these are the opportune times to invest in broader markets instead of large caps. During bear phase in broader markets, negative sentiments around small and mid caps have brought down excellent businesses down to historically low valuations. The fall in stock prices of many small and mid caps by more than 50% from their peaks has not happened for the first time. This has happened in past and companies with good business fundamentals have always bounced back strongly later delivering multi-bagger returns. When overall market sentiments are negative like we are witnessing now, quality businesses also face the heat. As bad stocks go down, good stocks go down with them too. But good companies make a stronger come back with earning revival once economy cycle starts its upturn.
Let us share some valuable insights to make you understand why we believe buying the right set of small and mid caps now can be a massive wealth creating opportunity in the long run. To make our readers understand bull as well as bear phase of markets, we have covered long term monthly charts of some of our own small and mid cap stocks recommendations (released under Hidden Gems and Value Picks) over last 9 years which at one point of time were down by 50% to 70% from their peak but turned out to be mega multibagger stocks in longer run delivering upto 64X returns.
Below are the Monthly Chart (since Jan'10) of 8 Multibagger Small Cap Stocks released under Hidden Gems service.
3. Roto Pumps (Hidden Gem released on 05th Aug'12) - Read Old Report
Start building your equity portfolio by making educated investment decisions, subscribe to our Hidden Gems, Value Picks, Wealth-Builder annual subscription services. Avail attractive discounts by subscribing to our combo packs. Below are the details of our annual subscription charges, simply click on SUBSCRIBE! link to subscribe to our services online using debit / credit card or net banking facility.
Below are the details of our services:
Also Read: 5 Stocks - Potential 5-Baggers in 5 Years Report