Small caps can be volatile. Sudden, sharp price declines cause lots of anxiety, and though many investors exhibit the requisite patience needed for smaller companies to develop their "story," numerous others find it hard to while away the hours until the market finally catches on. We're lured in by the success stories of today's blue chips, which were once small caps shaking up the marketplace. We want those same kinds of returns. Today. Immediately, if not sooner.

As one of the duo of guest analysts at Motley Fool Hidden Gems who recommended semiconductor chip tester company FormFactor (NASDAQ:FORM) to subscribers last year, I wanted the company to be a good performer. Not only did I want the long-term story to unfold as we had anticipated, but I wanted the short story to work out, too.

Hidden Gems has set an admirable goal for its members: to find top-notch small caps before everyone else does and then sit back and wait for the herd to catch up. For many investors, the waiting is sometimes hard to do.

Breathing easier with the Breathe Right maker
Looking back, you might say that buying an up-and-comer like CNS (NASDAQ:CNXS), the maker of Breathe Right nasal strips, seems like a no-brainer. It manufactures a leading product that gets wide exposure every time a pro athlete dons one to help him breathe better while playing. And certainly, the results speak for themselves: CNS was recommended in the September 2003 issue of Hidden Gems, and it's up more than 160% since then. Doubling in value in two years actually beats the performance goals Tom Gardner sets for himself, which is to double investors' money in three years' time or have it triple in value over five years.

But consider this: The ride CNS took was not a smooth, ever-upward trajectory. For most of the first year after it was recommended, CNS was a loser. It was down 11% after one year. Only in the second year of ownership did the stock price start to move forward, running as high as $31 a share. With its relatively new FiberChoice digestive products selling well and acquisitions always a possibility, the company now looks like a long-term winner to everyone.

Yet just before it ran up, people wondered whether the stock was a dog after all. Some sold a portion of their holdings as they tired of waiting; others sold all, hoping to get out if they could just break even. As subsequent history has shown, those were foolhardy moves that led to their getting out near the bottom.

History repeats itself
On the Hidden Gems dedicated discussion boards, there's been some impatience expressed lately over a number of the recent recommendations that are currently underwater. Some have questioned the quality of the picks because there hasn't been an immediate jump in their stock price. So how long is too long to wait for a stock you own to make its move?

Well, if you were an investor in NutriSystem (NASDAQ:NTRI), it could have been quite a long while. That company bounced along in penny stock territory, trading well under $5 a share for years, but this past year, its price has exploded. As people looked for help with getting their weight under control, the company was there to assist, and investors reaped the benefits of patience. NutriSystem has risen more than 1,500% over the past 12 months.

Similarly, Motley Fool Stock Advisor pick Quality Systems (NASDAQ:QSII) also bounced around before catching on with investors and the market. In the past year alone, it is up 170% and has risen by about 500% since it was first selected in that newsletter more than two years ago. But investors had to wait to get those returns because they didn't happen overnight.

Getting in before the beginning
CompuCredit (NASDAQ:CCRT) marks one of the biggest blunders of my investing career. I once owned shares of CompuCredit, but I became impatient and sold way too soon -- and it's gone on to double in price over the past year. I'm reminded of Shelby Davis, who almost never sold a single share of stock. That's long-term thinking we can all use and should try to practice.

I can't tell you that three months, six months, or one year is when you should expect your stock to run. What I can say is that the longer you hold your stocks, the better off you're bound to be. When you're buying into superior companies, then price moves on a day-to-day basis do not tend to accurately reflect the operating performance on a daily basis.

FormFactor has been up by as much as 50% and down by 10% since it was selected. It's currently up 23% from where it was recommended. But up, down, or sideways, the short-term moves are of little concern. It's the long-term story of this industry leader that assures me we've invested in a good business with a bright future.

Foolish takeaway
Every investor should want to locate good growth prospects, establish positions early, and wait for the analysts and institutions to finally discover what we've already found. Sure, we want those profits today, but allowing the story to develop -- like giving the market the chance to see what CNS had to offer -- is what has helped Tom Gardner and the Hidden Gems team beat the market averages by 16 percentage points since the newsletter's inception in July 2003. Waiting is sometimes difficult, but it's the surest way to harvest the greatest returns.

And right now, a 30-day free trial to Hidden Gems lets you reap the rewards of the newsletter's six-month review, where all active recommendations are analyzed for their current attractiveness. There's no obligation, and you get full entree to the picks, the Scorecard, and the discussion boards. It'll be time well spent. Try it today!

Fool contributor Rich Duprey owns shares of FormFactor, but he does not own any of the other stocks mentioned in this article. The Motley Fool has a disclosure policy.