Small cap stock investing is volatile. So, why risk your money investing in what is typically considered risky business? First, increased risk equals increased potential reward. However, there is another way to look at it. Investing in risk can actually decrease the total risk for you and your portfolio. Here is how it works: By diversifying your portfolio to include high volatility, moderate and minimum risk investments the overall return tends to be greater thereby actually eliminating risk and increasing volatility.

Ask yourself, what is easier to do – double your money from Kshs 1 to Kshs 2, or double Kshs 1Mn to Kshs 2Mn? It’s a no brainer. The same applies to corporations. Growth becomes more difficult as the company grows beyond a certain point.