*This is not financial advice. All content should be considered opinionated. We are not responsible for any of your gains and losses. I am neither a licensed nor registered financial expert. Please see a financial advisor before making investment decisions.

*This is not financial advice. All content should be considered opinionated. We are not responsible for any of your gains and losses. I am neither a licensed nor registered financial expert. Please see a financial advisor before making investment decisions.

Because of regulations with how institutional investors allocate capital, most of that capital goes towards bigger and less obscure companies. Plus, companies that are bigger gain more coverage from the media, from analysts, and from the public. There are a lot less institutional investors in the microcap world but, there is a lot of wealth to be made from investing in microcaps.

Investing in microcaps is like trying to invest in Amazon or Apple from the early days, companies that look to have a bright future but are currently small and are looking to grow. Because there is a lot less volume in smaller stocks, investing in microcaps can be compared to investing in illiquid assets. That's why you'll need to have a strong stomach and patience when investing in microcap stocks.

Most of the microcap investors are retail investors, not institutional investors because of the standards institutional investors have to obey under. Some of the best microcap investors happen to be small business owners since they understand more about running a business than the big money. 

One of the best things when it comes to investing in microcap stocks is that most of them have their financials audited and their SEC documents have the audited numbers. By understanding how to read business, you'll have a better chance of picking winners in the microcap space. 

Many of the greatest investors in history like Warren Buffett, Peter Lynch, and Joel Greenblatt all started their investing careers by investing in microcap stocks. This article can describe more on why many of these great investors invest in microcaps. 

At Dissecting the Markets, we are starting to redefine our approach in finding investment ideas and will start looking at microcaps to find enticing investment ideas.