Sizing Up the Markets: How to Invest Across Market Capitalizations

Many investors analyze companies based on their market capitalization, or market cap. Market capitalization is used to measure the total dollar value of a company’s outstanding shares on the stock market. Here’s how it breaks down:

• Large cap: $10 billion or more
• Medium cap: $2 billion to $10 billion.
• Small cap: $250 million to $2 billion.

But does size matter? Small-, mid-, and large-cap companies all have specific advantages and disadvantages. So it’s important to take a close look at how these companies function in the overall stock market.

Large-Cap Stocks

Large-cap stocks are part of well-established and well-known companies that have immense revenue streams and decorated track records.