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10 Steps to Buying Small Cap Shares

Under the Radar Report's expertise will show you how to set up a diversified small cap portfolio in 10 simple steps.

Our stock report will give you opportunities to buy shares in fast growing small cap stocks. We are a niche stock report and the stock research we give you simply isn't covered by mainstream reports or the media.

Our Stock Report focuses on small cap stocks which are stocks listed on the ASX that have a market capitalisation of less than $300million. We look for Small Cap shares with value that are priced cheaply.

Here are out 10 steps to buying ASX listed Small Cap Shares:

Step 1: Work out how much cash you want to put into the equities markets.

Step 2: Follow Radar’s Share Asset Allocation into cash (0-25%), small caps (20-30%), and big cap exposure with market linked investments/ (50-75%).

Step 3: Work out what you think about the value of the overall share market. If you think it’s expensive, don’t put all your allocation for market linked securities in at once. Right now, we think the market is fully valued because investors have pushed up the value of Telstra and the Banks to historically high levels.

Step 4:  Look through our TOP BUY RECOMMENDATIONS and our latest Small Cap Share recommendations, and work out which small cap stocks you are most comfortable with.

Step 5: Look through the Research Share Tips Tracker, to see our current advice on each stock. (updated weekly)

Step 6: List 5 or 6 Small Caps Shares that you like and put them on a watch list, along-side another 10 Shares that you are not sure about, but could be interesting.

Step 7: Use Under the Radar’s Quantitative Analysis Report to work out whether the stock is “in vogue” with the rest of the market. Do some research yourself – look through their recent announcements, and through any news that you can get a hold of. Plus look at their share charts, and whether or not they pay dividends.

Step 8: Work out, on the basis of the average PE of the market (which is about 14 times for industrial stocks) and 8 times for resource producers, whether you think they’re over or under valued.

Step 9: Jump in and buy small holdings of those that you think are good value.

Step 10: Watch your investments like a hawk and keep reading Under the Radar Report for
Tip Updates
, Quantitative Research Ranking, and new Small Caps to buy.

 How to structure a diversified small cap portfolio

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