MicroCap Review: Perritt Capital Management - History of Small Company Stocks

Ever since financial markets materialized, investors have been devising schemes to enable them to beat the market’s average return. Some invest in large companies, some invest in small companies, and others ignore company size and invest in companies of any size so long as they have potential to produce excess returns.

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Opinions expressed are those of the author and are subject to change, are not guaranteed and are not intended to be a forecast or as a recommendation to buy or sell any security.  References to other mutual funds should not be interpreted as an offer of these securities.

Diversification does not assure a profit nor protect against loss in a declining market.

Performance data quoted is past performance; past performance is not a guarantee of future results.  Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost.  Current performance may be lower or higher than the performance data quoted.  Performance data to the most recent month end may be obtained by calling (800) 331-8936. It is not possible to invest directly in an index.  Index performance in not indicative of fund performance.  To obtain performance, click here.

Small company stocks defined as the bottom quintile of securities ranked by market capitalization from 1926-2016. Large company stocks are represented by the S&P 500 index. Long-term Government Bonds are constructed with data from The Wall Street Journal. To the greatest extent possible, a one-bond portfolio with a term of approximately 20 years and a reasonable coupon was used each year. For the U.S. Treasury Bill index, data from The Wall Street Journal are used. Each  month a one-bill portfolio containing the shortest-term bill having not less than one month to maturity is constructed. The Consumer Price Index for All Urban Consumers is used to measure inflation Source: Ibbotson & Associates Stocks, Bonds, Bills and Inflation Yearbook, 2015 and Furey Research Partners, 2016.

The S&P 500 Index is an unmanaged broad based universe of 500 stocks which is widely recognized as the US equity market.  Russell Microcap Index measures the performance of the microcap segment of the U.S. equity market.  Russell 2000 Index is a small-cap market index of the bottom 2,000 stocks in the Russell 3000 Index.

Perritt Capital Management is the adviser to The Perritt Funds.

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