Secondary stocks, i.e. the shares of companies with a lower market value, are usually more risky. However, they also have higher growth opportunities than large, well-known companies.
Business Insider analyzed which stocks make up several of Morningstar’s top-rated small-cap funds. The second-tier stocks each gained between 30 and 63 percent within a year.
Apple, Coca Cola, McDonalds: Every investor has probably heard of most of the so-called blue chips. Blue chips, or blue chips, are the high-volume stocks of large companies on which the leading indices are based.
On the other hand, many secondary stocks, also known as small caps, are less well known. By definition, secondary stocks are shares in companies that have a lower market value. And an investment is usually associated with higher risks because their business models are less established. That doesn’t mean, however, that small caps perform worse than standard stocks.