Mighty mouses a strong investment, says Macquarie

With long-term results in mind, investors should continue to invest in small companies, Macquarie Funds Management small companies portfolio manager Neil Carter said yesterday.

“The danger with small companies is that they can be more of a disaster than large companies,” Carter said.

However, they can also provide far greater benefits, he told Money Management.

Carter is taking part in the Macquarie Funds Management investment road show, which is starting next Tuesday in Brisbane and will travel around Australia.

“[At the road show], we really want to reinforce the message that buying in the dips is the right way to go,” Carter said.

He said that while the first quarter of this year had seen sharp falls in small company stocks caused by the global liquidity crisis, advisers should not be turned off the small companies market.

He added that historically, Macquarie’s analysis showed that when the small companies market has done badly there have been good buying opportunities for stocks.

“We have seen a lot of forced selling from sellers who have received margin calls,” he said.

Carter believes that “over the long term, you should be investing with at least a five year horizon”.

“Advisers are doing a good job of helping investors not to panic,” he said.