Investing in ASX Small-Cap Stories - Insights From Samso.
- Noel Ong
- Jun 8
- 8 min read
Investing in small-cap stories on the ASX (Australian Stock Exchagne) in 2025 can seem overwhelming, especially for beginners. With the abundance of information available, it is crucial to know how to sift through it effectively to make informed decisions. As I have been in this industry for over 30 years and as an investor prior to the 1987 stockmarket crash, this blog will just outline some of my own experience and insights as to what has wroked for me over those years.
This is not a recommendation nor a blog that is a receipe for successful investing. At best, it will be a guide through various strategies to consider as you plan your investing path with your own financial choices.
For those investors who swim in the small-cap sector, you may think that your requirements may be vastly different to those that "invest" in the higher-cap companies. In my opinion, I would say that it is not. The need to understand the stock and all the parts that make that stock a business is fundamentally the same. It is the scale of the information that is different.
Investing in ASX Small-Cap Stories.
Informed decisions stem from a thorough understanding of market dynamics and personal financial goals. Instead of reacting to trends or news headlines, successful investors base their choices on research and evidence. They analyse data, assess risks, and evaluate the potential of various assets.
To illustrate the importance of informed decision-making, let's consider the example of two investors: Investor A buys stocks based on a hot tip from a friend, while Investor B conducts detailed research on the company's performance, market conditions, and future potential.
Investor A may make short-term gains, but without a strategy, they risk significant losses when the market turns. In contrast, Investor B, who invests with a solid understanding, is more likely to achieve sustainable growth over time.
Research and Analysis for Informed Decisions
The first step in making informed decisions is conducting comprehensive research. This involves collecting relevant data about the investment landscape, specific industries, and individual assets.
A good approach is to use various resources to broaden your perspective. Start with financial news outlets, corporate earnings reports, and investment analysis platforms. For example, consider sites that offer detailed company profiles, stock analysis, and investment insights.
According to a survey by the Financial Industry Regulatory Authority (FINRA), nearly 80% of successful investors spend time analysing their investments. This research allows them to understand key metrics like price-to-earnings ratios, dividend yields, and company growth rates.
For those investors who are looking at the small-caps, be aware of platforms that are promotive, look out for content that is balanced and create a discussion. There are many platforms out in the space that merely repeat the content from the companies. Look for content providers who create organic discussions and are not promoting the company's highlights.
Actionable Tip: Create a checklist of crucial metrics to evaluate each potential investment, and track your findings systematically.
Setting Clear Investment Goals
Another vital factor in making informed decisions is having clear, realistic investment goals. It is important to identify what you want to achieve with your investments, whether it's saving for retirement, purchasing a home, or funding a child's education.
Your goals will influence the types of investments you pursue and your risk tolerance. For instance, if your goal is long-term wealth accumulation, you might lean towards stocks or index funds, willing to withstand short-term fluctuations. Conversely, if you need access to your funds in the near term, you might prefer bonds or high-yield savings accounts.
Consider this insightful statistic: A study conducted by the CFA Institute found that 70% of investors who set clear goals were more likely to achieve their desired financial outcomes.
Diversification: The Key to Mitigating Risk
Diversification is one of the most effective strategies for minimising risk in an investment portfolio. By spreading investments across various asset classes, sectors, and geographic regions, you reduce the impact that any single investment could have on your overall portfolio.
For example, instead of investing solely in technology stocks, you could allocate funds to real estate, commodities, and international markets. This mixed approach helps to stabilize your returns and build a more resilient investment strategy over time.
Moreover, research from Morningstar reveals that well-diversified portfolios tend to outperform less diversified ones in the long run. This reinforces the idea that a balanced approach can lead to more sustainable growth.
As a serial investor in the small-cap sector, the diversification for us will still be focusing on a spread of sectors, but for those that play solely in one sector, such as the small-cap mineral resources, diversification will come in the form of different commodities and/or different stages of exploration and mining.
Actionable Tip: Review your portfolio regularly to ensure it reflects your risk tolerance and investment goals, making adjustments as necessary.
Learning from Mistakes and Successes
Every investor will face ups and downs. The key to becoming a successful investor in the mineral resource sector is to learn about the company in regards to the management and the major shareholders. The small-cap mineral resource sector is notorious for share prices taking off and then leaving the buyers at the top of the run to hold on to the baby.
To master the roller coaster ride, you will have to talk to industry participants, and one of the best ways is to get onto a couple of social media platforms like X and LinkedIn. Look for the people who post information, but beware of those who are just posting for promotions.
I have to admit that there are not a lot that I know who I would recommend, except for Roland Gotthard, who is a serial poster on LinkedIn. Roland is a straight as you are going to get, and he is very capable in a technical aspect.
I am sure there are more that are in the same category, but none that I could name as I don't know them intimately. I have had several conversations with Roland, and I have met him in person. I feel his genuine intent, and that is the only reason I would recommend his content.
In my experience, most of the time my investment failed, I made the wrong timing decision in an exit, so learning from your mistakes is a very important trait to develop. Research for entry and timing for exit. I was told once, and this theory has never failed me: Always have a reason for entry, and when that reason changes for whatever reason, that is your exit trigger.
Statistic Alert: According to a report by TD Ameritrade, over 60% of investors believe that their past mistakes have ultimately made them better at investing.
Utilising Technology for Information
In today's fast-paced environment, using technology can vastly improve your decision-making process. There are numerous tools available designed to assist investors in analysing data, tracking trends, and managing portfolios efficiently.
Online platforms and apps offer everything from market news alerts to real-time stock tracking. For example, services like Bloomberg or Yahoo Finance provide updates that can help you stay on top of the market changes.
Additionally, several robo-advisors use algorithms to create personalized investment strategies based on your goals and risk tolerance. This technology can provide automated insights, letting you focus on strategy and long-term growth.
Actionable Tip: Explore different investment apps and tools to find the ones that suit your style best. Make technology work for you.
Building a Support Network
Lastly, consider the power of a strong support network. Surrounding yourself with knowledgeable individuals can accelerate your learning and provide new perspectives. This network can include family, friends, financial advisors, or even online communities where you can discuss investment strategies.
One significant advantage of such networks is the ability to share experiences and insights. Engaging with others allows you to ask questions and gain access to resources you might not have encountered alone.
Important Note: Ensure that the individuals you turn to for advice are experienced and knowledgeable in investing practices. Using trusted resources can further enhance the quality of the support you receive.
Concluding Comments from Samso
Investing wisely is a skill that requires continuous learning, research, and strategic planning. By implementing the strategies discussed, you can significantly improve your decision-making process. Remember, informed decisions come from a combination of data analysis, setting clear goals, mitigating risks through diversification, learning from past experiences, leveraging technology, and building a supportive network.
The underlying habit for investors, based on my experience, is to be patient. My best investments have come from long-term positions that are measured in years. There are short-term wins, but again, with my experience, the biggest losses have been from short-term positions. There have been big, long losses, but the magnitude of the loss compared to the wins was minimal.
Here at Samso, we pride ourselves on delivering content for investors that is independent and informed by over three decades of experience in the industry. Our content is well researched and is only created if the team see a merit in discussing the company story.
Investors can view our three main products in Coffee with Samso, Samso News and Samso Insights.
There may be numerous paths to success in investing, but the common thread among successful individuals is that they remain committed to making informed decisions. Equip yourself with the right knowledge and tools, and you will be well on your way to achieving your financial goals.
Most importantly, investors need to be absolutely diligent in understanding their own risk-reward tolerance and capabilities. Never bite off more than you can chew is my parting comment. As they say, Rome was not built in a day, and the Great Wall took is a great phenomenon because it took centuries to build.
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Disclaimer
The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints.
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