7. Think tiny. Microcap stocks, with market values of about $200 million or less, have historically gained about two percentage points more a year than larger stocks.
Since not all of these businesses will withstand the test of time, invest via a diversified fund. Perritt MicroCap Opportunities(PRCGX) ($1,000 minimum initial investment) and Managers Micro-Cap(MMCFX) ($2,000 minimum investment) have beaten more than 80% of their peers over the past 15 years.