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Mid and Small Cap Stocks

Mid Cap and Small Cap stocks are units of ownership in corporations that are smaller than Large Cap corporations.  The term “cap” is a reference to “market capitalization”, which is the aggregate market value of a firm.

Stock investments in smaller corporations are often viewed as having greater risk and return volatility, because they may be less mature , not have as strong of a market position, or may be in less developed industries or markets; however, they are often viewed as having greater growth potential than large cap stocks.

Adjusting the mix of stocks in your portfolio between large cap stocks and mid/small cap stocks is a way of adjusting the risk-return profile of your portfolio

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Glossary

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