This portfolio already has the ‘Market Cap Risk’. So, one should not add more of small or mid-cap companies to it. When clicked ‘Reduce Risk’, it follows the same method as that of ‘Sector Exposure'.
Click ‘Business Risk’
This portfolio already has the ‘Market Cap Risk’. So, one should not add more of small or mid-cap companies to it. When clicked ‘Reduce Risk’, it follows the same method as that of ‘Sector Exposure'.
CMP: 117 | ₹46 K (4.4% of Portfolio)
CMP: 422 | ₹41 K (3.9% of Portfolio)
CMP: 706 | ₹35 K (3.4% of Portfolio)
CMP: 399 | ₹24 K (2.3% of Portfolio)
CMP: 292 | ₹23 K (2.2% of Portfolio)
CMP: 266 | ₹22 K (2.1% of Portfolio)
CMP: 1393 | ₹19 K (1.9% of Portfolio)
CMP: 135 | ₹18 K (1.7% of Portfolio)
CMP: 183 | ₹17 K (1.6% of Portfolio)
CMP: 86.8 | ₹16 K (1.6% of Portfolio)
CMP: 13384 | ₹13 K (1.3% of Portfolio)
CMP: 714 | ₹13 K (1.2% of Portfolio)
CMP: 406 | ₹12 K (1.1% of Portfolio)
CMP: 143 | ₹11 K (1% of Portfolio)
CMP: 392 | ₹10 K (1% of Portfolio)
CMP: 627 | ₹10 K (1% of Portfolio)
CMP: 463 | ₹9 K (0.9% of Portfolio)
CMP: 32.9 | ₹9 K (0.9% of Portfolio)
CMP: 85.6 | ₹8 K (0.7% of Portfolio)
CMP: 390 | ₹7 K (0.7% of Portfolio)
CMP: 129 | ₹6 K (0.6% of Portfolio)
CMP: 972 | ₹6 K (0.6% of Portfolio)
CMP: 130 | ₹5 K (0.5% of Portfolio)
CMP: 439 | ₹4 K (0.3% of Portfolio)
CMP: 1655 | ₹3 K (0.3% of Portfolio)
CMP: 720 | ₹2 K (0.2% of Portfolio)
CMP: 22.4 | ₹2 K (0.2% of Portfolio)
CMP: 40.1 | ₹2 K (0.2% of Portfolio)
An often overlooked source of risk in a stock is the size of its market capitalization; a measure of what the market thinks the company is worth.
The performance of small companies, some with weak business models, can deteriorate quite easily. Their performance could be affected by economic downturn, spurt in commodity prices, business problems faced by their large customers, lack of resources, etc. There is the additional risk of not knowing enough about the company, since small caps are not studied as closely as large caps. This exposes you to the risk of poor governance and fraud.
However, the potential of high returns from small caps should not be ignored. Small cap companies with a good business model grow faster, which leads to a large rise in their stock prices and results in very good returns.
If you have a moderate risk profile, you should invest not more than 20% in small caps. This will enable you to participate in the potential for growth from small caps, while limiting the market capitalization risk to your overall portfolio. Simultaneously, invest 60% in large caps with low volatility and steady returns.