ULTRA SMALL CAP

(1997) Yes there is more risk, but a study by John Montgomery of the smallest of companies indicates that the reward outshines most other categories of stocks over time. He indicated that when things were bad, ultra small caps dropped 63% more than the S&P would. But when the market moves upward (far more often), ultra small caps did 87% better. And ultra small caps come back faster as well. Of the worst inflation adjusted 10 year returns periods for 1926 to 1995, it was the only group that had a positive return. I am using some of this but only in small amounts cause all the numbers aren't in yet.