For the Period 1926-2009, Small-Cap Stocks Outperformed Large-Cap Stocks by a Significant

question 38

Short Answer

For the period 1926-2009, small-cap stocks outperformed large-cap stocks by a significant amount.
Given this, why do investors still purchase large-cap stocks?

---

Definitions:

Venture Capital

That part of household savings used to finance high-risk business enterprises in exchange for stock (and thus a share of any profit if the enterprises are successful).

Start-Up Firms

New businesses in the initial and often innovative stage of operations, aiming to meet a marketplace need by developing a viable business model.

Scientific Knowledge

Information gained through systematic observation, experimentation, and reasoning in the sciences, leading to understandings and predictions about the natural world.

Research

The systematic investigation into and study of materials and sources in order to establish facts and reach new conclusions.