Search+Investment IdeasSynopsisThere are more than 3,000 small-caps stocks listed on the stock exchanges. Only a handful are actually worth looking at; and even fewer worth having in a portfolio. There is, however, another side to this. If you are able to buy the right small-cap stock, your returns will be very high. But if you get it wrong, the risk of capital erosion is ever-present. Does market sentiment change overnight? And do all things (positive or negative) get priced in quickly? Let’s consider recent history to answer these questions. When the US-Iran war started, the initial expectation was that it would end soon; and the market reaction was not that strong. But when realisation dawned that it might be a long-drawn war, the market came under strong pressure and small- and mid-cap stocks were badly hit. Today, oil ETMarkets.com 15 mins readJul 01, 2026, 02:22:00 PM ISTGift this Story to your friendsFONT SIZEAbcSmallAbcMediumAbcLargeSAVEPRINTCOMMENTContinue reading with one of these options:Limited AccessFreeLogin to get access to some exclusive stories & personalised newslettersLogin NowUnlimited AccessStarting @ Rs120/monthGet access to exclusive stories, expert opinions & in-depth stock reportsSubscribe NowETUh-oh! This is an exclusive story available for selected readers only.Worry not. You’re just a step away.What’s Included withETPrime Membership