How Market Crashes Affect Small-Cap Stocks?

Small-Caps in a Crash

– Most vulnerable during corrections.
Lack of liquidity & panic selling hit hard.

Sharp Declines in Price

– Even good stocks drop 30–50%.
– Lower institutional holding = high risk.

Weak Hands Exit First

– Lower conviction investors exit early.
– Fundamental value ignored in fear mode.

Recovery Takes Time

– Blue-chips recover faster.
– Small-caps take time to regain trust.

Investment Insights

– Hold quality names with strong balance sheets.
– Crashes create long-term buying opportunities.