Small-cap companies typically carry more debt relative to their earnings than large firms. Because of this, their performance is highly sensitive to the cost of borrowing:
Because small-caps are highly volatile and can suffer double-digit losses during downturns (e.g., losing 36% in 2008), timing an entry isn't enough; you must also time your exit. What Is Small Cap Fund - Meaning, Returns and How to Invest when to buy small cap funds
Buying when small-caps are trading at a deep discount (on a price-to-earnings or price-to-book basis) compared to large-caps can offer a "margin of safety" for long-term gains. 4. The 7-Year Commitment Small-cap companies typically carry more debt relative to