3 Top Small-Cap Stocks to Buy in December
With the market surging to all-time highs recently, investors are wondering how much better things could get. Large-cap, tech-focused stocks have outperformed in 2020, just as they have for the last five years. Yet small-cap stocks -- defined generally as stocks with market caps under $2 billion -- could be places to look for big gains in 2021.
That's because small caps are usually more sensitive to overall economic growth. With the economy recovering from COVID-19, and the Federal Reserve determined to keep short-term interest rates at zero until at least the end of 2023, economic growth should pick up and carry small-cap stocks along with it. Furthermore, while perceived as higher-risk, small companies generally have an easier time growing at higher rates than large companies, due to the law of large numbers.
In that light, the following small stocks seem poised for big-time gains in the new year.
Source Fool.com
