From emerging firms that will become the next big thing to the household names that dominate economies, thousands of companies make up the global stock market. But how do you go about investing in the ones that are right for you?
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.
