When it comes to finding the best returns, smaller really is better. Small-cap stocks have managed to outperform their larger brethren over the long haul.
Since the creation of the S&P SmallCap 600 index back in 1994, the index of America’s smallest 600 stocks has managed to produce a higher cumulative return than the large-cap S&P 500 index. Small-cap stocks in the index have managed to return 209% vs. 188% for their larger twins.
Looking back further, the power of small-cap stocks is even more pronounced.
According to studies conducted by famous economists Eugene Fama and Kenneth French from 1926 to 2012, small-cap stocks managed to outperform large-caps by a cumulative extra return of 253%.
When it comes to finding high returns, small-cap stocks just can’t be beaten. With that in mind, here are three small-cap stocks to buy today.