Kunal Sawhney on lucrative small-caps space amid US elections 2020
As the recession bites, investors can look at paradigm shifts and emerging trends that are opening up new opportunities for small businesses.
Investors need to take investment decisions considering the fundamentals and technicals of the financial asset while dodging behavioral biases to minimize damage in current market turmoil.
Investors can utilize the law of large numbers to cherry-pick small-cap players. It involves choosing small companies that serve large, burgeoning markets as the companies can then realize huge growth with even small market share.
Current valuations should be carefully evaluated relative to long-term earnings potential. Market players can look at small-cap companies in healthcare, technology, e-commerce space with strong innovation profiles.