The Importance of Due Diligence

These days, it's common for people to spend more time searching the web for information on cars they're interested in buying than they do on companies that they'll invest in. New cars lose value once you drive them off the lot, and investors need to be aware that they can lose value in their stocks just as fast. Selecting small-cap stocks for your portfolio should take time and involve a thorough due diligence process of reviewing potential investments before you actually buy. Once you've made your choice, place your order, but don't stop analyzing. Take the time to continue following and reviewing your investments to make sure the reasons you bought them in the first place remain valid. If things change drastically, don't be afraid to cut and run. Investing seriously in small-caps isn't a quarter mile sprint; it's more like a marathon that needs a dedicated and long term approach.