by ID Analysts, Investing Daily
It’s a belief as old as investing itself.
Ultra-high returns must-simply must!-come with outsized risk.
Except there’s a problem. It’s not true.
Here’s the proof, courtesy of researchers at Morningstar:
- If you had put $10,000 into large cap stocks in 1975, you’d be sitting on $327,000 today. That’s not bad.
- But the same $10,000 invested in small caps would have ballooned to an incredible $885,500-or 175% more than the large cap gains … and a staggering 8,750% return overall.
It also adds up to 12.3% annual gains piled up year after year for the past 39 years-demolishing the old axiom that investing in small cap stocks is exciting but dangerously volatile.
And here’s something else that will surprise you: today’s small cap gains are even more impressive-the small cap advantage is now up to 352%!
At the end of this article, we’ll show you how to get immediate access to 6 hugely profitable small caps that have already risen from 60% to 89%-and they’ve got triple-digit gains well in sight.
But before we get to that, let’s dive into what’s behind small caps’ incredible outperformance.
Not Your Father’s Small Cap Stocks
Today’s small caps are far different from those of bygone years. So much so, we’ve been calling them by a new name-“New Chips.” Why New Chips? Because they combine the fast-rising, “better mousetrap” characteristics of small caps and the buy-and-hold, long-term growth of blue chips.
Just how fast rising, you ask?
We’ve uncovered New Chips delivering 10-year capital gains like 4,180% … 5,810% … 6,330% and higher-even soaring into quintuple digits.
In fact, 90% of the top 10 gainers from 2002 to 2012 are New Chips.
Keep in mind: these are not quick-hit gains. These are gains that can change your life. Just one New Chip winner can bankroll an early retirement, a millionaire lifestyle and “trips of a lifetime” every year for the rest of your life!
But here’s the ultimate shocker…
The same Morningstar data that reveals New Chips’ superior gains also shows that portfolios including these small cap stocks carry less risk.
That really turns the “rules of investing” upside down.
Short term or long term, it doesn’t matter. Small caps maintain their advantage of higher gains with lower risk-regardless of the time frame.
About now you may be thinking: this can’t be! But it is.
Just ask Warren Buffett.
The Incredible Secret That Made the Masters Rich
This low-risk, growth-accelerating strategy is precisely what put Warren Buffett, Peter Lynch and many other master investors on the road to their fortunes.
Early in their careers, these giants grasped that stocks with extremely high gain potential aren’t all risky, as most investors believe. Not by a long shot.
Buffett and Lynch made their first millions in the 1980s on swift-moving, opportunistic small cap companies that multiply wealth … often by triple and quadruple digits.
And today the prospects for deploying the same Buffett/Lynch small cap-or New Chip-strategy look even brighter.
In fact, we firmly believe we’re in a golden age for innovative, disruptive New Chip wonders that’s going to last for a long, long time. And most investors don’t know it.
We say that with confidence because…
Small Cap Innovators Are Everywhere
You see, we also believe Buffett and Lynch were among the early spotters of another key element of this strengthening trend: innovative and disruptive companies aren’t automatically technology outfits.
Sure, many New Chip breakthroughs are launched on new technologies.
But they’re also begun with powerful new ideas. They often smash older companies’ stodgy legacies and go on to create thousands of new millionaires.
Just look at what happened to these industries:
- Caught napping: The coffee industry was dozing when Green Mountain Coffee Roasters (NasdaqGS: GMCR) gave it a strong jolt of competition with its breakthrough single-serve coffee dispensers. Early investors have pocketed a 10-year return of 3,450%.
- Blindsided: The soft-drink business never saw Monster Beverage (NasdaqGS: MNST) coming-the upstart now boasts a $9.2-billion market cap and is a major player. Early investors have pocketed a 10-year total return of 21,050%. A flyer investment of a thousand bucks became $210,500.
Let’s take it a step further and look at one of our favorite examples of a new (and decidedly non-tech) idea sending shockwaves through an old industry.
Think back to the turn of the century-the year 2000 and the tech bubble.
While the investing crowd back then was chasing Internet stocks trading at P/E ratios of 100 and up, the real future winners were the cheap little non-tech guys nobody was paying attention to.
Case in point: Cal-Maine Foods (NasdaqGS: CALM).
This obscure egg producer in Hinds County, Mississippi, figured the time was right for consumers to pay a premium for “specialty shell eggs.” Were they ever right!
The company introduced a line of nutritionally enhanced, cage-free, organic eggs. You may have scrambled a few of Egg-Land’s Best yourself. The stock has hatched a giant-sized return of 5,188% since 2000, when you could have bought it at $1.44.
And it’s all thanks to the humble egg. Not smartphones or some high-tech variation thereof.
Cal-Maine is a New Chip stock now.
The truth is, agile small cap value stocks still create millionaires faster than any other investment on the planet. And the best news is … there are plenty of these stocks out there today.
That brings us back to the 6 growth rockets I mentioned at the start of this article, any of which could be…
The Next 5,000% Gainer
Today we’d like to send you a very special invitation-an opportunity to climb aboard these 6 small cap superstars before they explode.
Jim Fink, our in-house small cap investing expert, has painstakingly researched all 6 of these companies, and we’d be delighted to send you everything you need to know-including names, ticker symbols and complete investing guidance on each and every one.
It’s all packed into Fink’s brand new report, called “New Chips: Six Essential Picks to Profit From the Coming Golden Age of Small Cap Stocks.“ You get your copy absolutely free, just for taking Fink’s Roadrunner Stocks advisory for a no-risk 90-day trial run.
As we mentioned, we’re already up 60% to 89% on these winners-and we’re looking for much, much more.
Don’t miss this once-in-a-lifetime chance to get in on the next Monster or Cal-Maine before they take off into the stratosphere.
Editor’s Note: The picks Jim reveals in this report are the same kind of stocks he used to turn $50,000 into a $5.3-million fortune. And he’s been happily adding zeroes to the investment accounts of Roadrunner Stocks subscribers since we launched the service two years ago.
Now you can discover 6 of his hottest selections with no risk and no obligation whatsoever. You simply won’t find an offer like this anywhere else. Don’t delay.