"Investors just have to remember you never want to put all your eggs in one basket,” says financial expert Brant Spesshardt. “It’s long term, and you want to try to keep your investments as simple and as boring as possible." This philosophy is clear, and one echoed by such experts as Warren Buffet. But keeping investments too low risk means a pretty slow return on our investments.
That’s where small cap mutual funds come in. Small cap mutual funds are one of the spicier of mutual funds, for those who are risk-averse but not too risk-averse. These are bundles of investments in growing companies, businesses whose stocks could go way up, or way down. The reason small cap mutual funds are great is that they’re less risky than investing in individual companies. Diversification is the magic word here, grouping many funds together so that your risk factor is limited. The only question is, which one will you choose?
It’s as simple as Yelp: Just look at the ratings! Small cap mutual funds are ranked by return so that with a little research you can choose the right one for you. It just depends on your priorities, and which sector of the economy you choose as the biggest opportunity for growth. Not to mention those expense ratios, which vary considerably.