Looking to make a large profit in the stock market? Then maybe small cap stocks are right for you. Small Caps are often labeled as a good investment because of their ability to grow, however the old saying is true - the greater the risk the greater the reward. If you can see the potential in such stocks and are willing to take risks, then investing in small cap stocks is the way to play the game.

Small cap stocks have a relatively small market capitalization, generally between $300 million and $2 billion. To calculate market capitalization (market cap), take the number of outstanding shares and multiply it by the current per share price.

Despite the risks associated with small cap stocks, there are some good reasons to consider adding them as a modest portion (usually no more than 5% - 10%) to your portfolio :

• Every successful company today started out small. Who knows where the next Google is going to come from, so keeping an eye on small cap stocks can be a huge advantage. Just think, if you invest in the next big technology giant when they are small fish in the sea, what kind of profit you can make!

• Everyone has known that the best way to get rich on Wall Street is to buy stocks that are undervalued and have room to grow. If you take the time to research small cap companies, you can often invest a small amount of money with the expectation of a high return.

• It is easier for a small company to double its sales than it is for a large company. Fast growth is easier for small cap stocks.

• Small companies tend to be less affected by market attention. This keeps prices from being driven too high or dropped too low.

So, how do you find a good small cap stock? It requires more work than investing in the larger, better-followed companies since there may not be much information available. The best thing to do is visit small cap stock promoter websites, because what they do is get the word out on small cap companies' news and information. You can find information through small cap stock forums, press releases, and blogs as well. Look for positive news with growth, acquisitions, mergers, and better than expected earnings. Just be wary of people that tell you to "buy now!" - find small cap stock promoters that are objective with the information that they give.

Overall, the question that you need to ask yourself before investing in small caps is, "Does the reward outweigh the risk or vice versa?" Before you invest in any small cap stock you need to decide how much of a reward you are looking for and how much of a risk you are willing to take.