As bulls make a comeback, the small-cap segment is again witnessing increased activity coupled with positive market breadth. So, while being bullish may not be a bad idea, there are two things you need to be aware of as an investor. First, the risks are higher because valuations are still high. Second, when the correction comes, small-caps face a liquidity hit more than any other segment of the street. If you still want to increase exposure to small-cap stocks, do it with money you will not require in the short term. Because, in the short term, small-caps could come under pressure. But in the long term, they are capable of delivering – provided enough filters have been applied while selecting them.
