Introduction to the Video
When most people think of publicly listed stocks, they typically focus on mega-companies like Amazon, Apple, and Facebook. But as Dr. Tim Edwards from S&P Dow Jones Indices explains, these well-known giants represent just a fraction of the 11,000 stocks listed globally.
This video explores the benefits of diversifying beyond large-cap stocks to include mid-cap and small-cap companies. Smaller firms often have greater growth potential, making them a valuable addition to a well-rounded investment portfolio. Dr. Edwards highlights the historical success of companies like Apple but notes that such exponential growth is unlikely to repeat for today’s largest firms—opportunities for such success stories are more likely found among smaller companies.
The video also addresses the tendency of European investors to focus almost exclusively on large-cap stocks, often overlooking mid and small-cap opportunities. However, innovations like low-cost ETFs are making it easier to diversify across company sizes and access these overlooked opportunities.
If you’re seeking to optimise your portfolio, this video provides practical insights into the advantages of including smaller stocks alongside large-cap index funds for potentially higher returns over the long term.
Disclaimer: This video does not constitute financial advice. We recommend that you speak to a qualified financial planner for advice tailored to your individual circumstances and goals. Financial markets may go up or down, and you are not guaranteed a return on your investment. Past performance is not necessarily a guide to future performance.
