The time to buy?

Warren Buffet famously said, "to be fearful when others are greedy and greedy only when others are fearful."

For many investors following this mantra, the widespread fall in the value of companies represents an exciting opportunity to buy into the markets at a time when many businesses may appear undervalued.

In particular, smaller companies are often perceived as being more risky and so their share prices tend to be hit first and hit hardest when investors are fearful. However, within this marketplace there will be successful, growing businesses that may have been unfairly devalued, and as individual stocks they have the potential for considerable growth in the longer term.

Benefit from 'asymmetric knowledge'

With smaller companies, there is the added opportunity for people who are experienced and knowledgeable in that market to have an understanding of these companies that has not already been factored into their share prices. This compares favourably to larger equities, where the market itself generally ‘knows more' than any individual. This ‘asymmetric knowledge' should then benefit investors looking to grow their investment in the medium and long term.

The CF Octopus UK Micro Cap Growth fund is positioned to enable investors to invest in smaller companies that we believe are undervalued. Our investment team has extensive experience in this marketplace, and meets with hundreds of small companies every year to understand their businesses.