Beat The Market With Small Companies But You Have To Do This

Beat The Market With Small Companies But You Have To Do This by Tim du Toit, Quant Investing

[timeless]

Can you beat the market by investing in small companies?

This is a simple question I am sure you have also asked yourself but not something that can be answered as easy as I thought.

Past research not encouraging

Past research on small company returns, which I am sure you have also seen, found that:

• They were mainly generated in January
• They varied significantly over different time periods
• The outperformance declined substantially from the early 1980’s when the first research papers appeared saying that small companies outperform.
• The best performing companies were too small to buy (less than $5 million in market value)
• Small company outperformance could not...
  

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