Investing in the stock market offers a wide range of opportunities, and one of the key decisions investors must make is choosing between small-cap, mid-cap, and large-cap stocks. Each category represents companies of different sizes, with varying levels of risk and potential returns. Understanding the characteristics, benefits, and drawbacks of each category can help investors make informed decisions and build a diversified portfolio. In this comprehensive article, we will explore the differences between small-cap, mid-cap, and large-cap stocks, their pros and cons, and practical tips for incorporating them into your investment strategy. Understanding Market Capitalization Market capitalization, or market cap, is a measure of a company's total value, calculated by multiplying its stock price by the total number of outstanding shares. Companies are typically categorized into three main groups based on their market cap: Small-Cap : Companies with a market capitalization of less than ...
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