Buy and HOLD Small Cap Stocks FOREVER! Index Fund Investing #shorts

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Simple investing strategies are the way to go for most of us. One way to simply invest is to buy and hold index funds. Of the many different types of index funds, a Small Cap Index Fund may be perfect for your risk tolerance.

Small Cap stocks (defined by their market caps) are typically younger companies whose main objectives are breaking into a market and accomplishing aggressive growth. Small Cap stocks are much like growth stocks, but there's more room for that growth...so, naturally, small cap stocks are more risky.

Small cap stocks are trying to accomplish explosive growth without the resources of their larger counterparts (think Big Tech growth stocks), but the upside is what makes them so attractive. Many will fail, but the ones that succeed will more than make up for those losses in your portfolio. Over long term horizons, small caps have performed exceptionally well relative to the S&P 500.

And if you're worried about the stability of small cap stocks, here's an interesting fact. Tesla was once trading as a small cap. And that explosive growth is what made Elon Musk the richest man on Earth.

I've personally used iShare's IJR, but there are numerous other funds out there. IJR tracks the S&P 600 while others may track the Russell 2000 (a much more popular index). Their performance does not vary much, but if diversification concerns you, 2000 companies is a lot more than 600.

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