BALTIMORE (Stockpickr) -- There's just something about the small stocks. Small stocks -- namely the ones priced under $10 per share -- tend to be more exciting than their higher-priced brethren. Their price swings are more pronounced, and they historically rally the hardest after pricier names have already puttered out.
And of course, that increased volatility goes hand-in-hand with increased upside potential.
A lot of what drives small stock performance is psychological. A share price under $10 gets a lot of people thinking "cheap" regardless of valuation; that's especially true among newer investors, who put a lot of weight on share price when making investment decisions. The truth is that even more risk-averse investors can find attractive trading opportunities in low-priced stocks, it's just a matter of identifying the high-probability setups.
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