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Investing in smaller companies

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4. The aim of investing in smaller companies

The objective of investing in small caps is simple: to achieve big capital growth that couldn't normally be achieved by investing in large companies.

In general, you should consider looking for the capital growth over the medium and long term. Medium term means 3 to 5 years; long term means 5 to 10 years. This doesn't prohibit short-term investment in small caps on a selective basis, but if you expect to run an entire small cap portfolio in the expectation of quick capital growth you are likely to be disappointed.

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