Small caps started 2013 on a high note, but have since taken a hit. So where can investors find opportunities?

The small-cap market is riskier, but investors are compensated for taking a gamble on new companies.

When do small caps outperform? When equities are in favour, answers Jennifer Law of CIBC Global Asset Management. She’s the manager of the Renaissance Canadian Small Caps Fund.

Given the volatility of 2011 and the uncertain economic climate, investors are asking one central question: How do you pick the winners and avoid the losers?

In the first half of 2011, the Yukon enjoyed another gold rush, with a surge of exploration companies seeking a new mother lode in the largely unexploited wilderness. But the excitement was unsustainable.