These are often stocks of Blue-chip companies that are established undertakings with large cash reserves available to them. It is interesting to note that the big cap companies larger size doesn’t mean they are growing faster. In fact, it is the small stock firms that continue to outperform them over a longer period. Yet large-cap stocks come with the downside of helping investors to reap higher returns relative to stocks in smaller to mid-cap firms, guaranteeing the long-term survival of the money.
Mid Cap Stocks
These are the stocks of medium-sized companies that have a 250 Crore market capitalization to about 4000 crores. These firms have a well-recognized name on the market that brings with it the benefit of growth potential, as well as the stability that is usually accompanied by being a seasoned market player. Mid-cap companies have a good track record of steady growth and are very similar in size to the blue-chip stocks. Those stocks do and expand well in the long term.
Small-cap stocks, as the name suggests, have the lowest market value compared to their counterparts. These are small businesses that have up to 250 market capitalization and have the potential to grow in the future at a good pace. Investors able to commit to the long run and not very sensitive about the present returns, and willing to stand their ground through price volatility, will make significant profits in the future. As a buyer, you should purchase these stocks in the initial stage of the business when they are available at a cheap price. There’s no certainty as they’re relatively new about how the company will perform in the market.