Understanding everything that is involved in investing or trading small cap stocks takes study over a period of time. Many favor large cap stocks over small cap stocks because the brands are known. But which is better for you and your situation? Investing in small cap stocks is a great way to diversify your portfolio with some shares of lower capitalized companies. These stocks often offer better returns as they have higher beta values and move quicker than other stocks. Just be careful of the risks.

If you are looking to purchase and hold small cap stocks within mutual funds, understand that different funds define what is a small-cap stock in different ways.The traditional definition of a small-cap stock is one with the market capitalization between $300 million and $2 billion.

Investment Frontiers Symposia (Photo credit: apec2011ceosummit)

If you have already paid off all of your debt in credit cards and have in mind financial goals like buying a home, paying college tuition, or retirement savings, then you should do your homework prior to making any investment decisions.  You should have the answers to the following questions:

• How much risk for tolerance do you have?
• What kinds of investments are you looking at: mutual funds, bonds, stocks?
• Are you interested in purchasing an annuity or an IRA?
• Do they offer a 401K plan at your job?

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Years ago, women depended on their husbands to bring home the money, invest it, take care of it and save it. Times have changed, thank God, and women are controlling their own finances and investments with the money that they make. Women are choosing what to do with their money and how to protect their futures, their families and their careers.

How to Choose Your Investments Wisely

If you are like most people, you are confused as to how to invest your money, and which vehicles are best. Tax-Free savings accounts? Mutual funds? Stocks?  Bonds? Index Funds? Commodities? The list seems endless, and the risks are different for each one.  Sometimes getting an adviser is counter-productive, as they have their own interests in mind, and will recommend only the companies they get a commission from.