Page 102 - FlipBook BACK FROM SARAN - MAY 5 2020 - Don't Make Me Say I Told You So_6.14x9.21_v9_Neat

Section 6

Large-Cap, Mid-Cap, and

Small-Cap Stocks

If you decide to allocate a portion of your portfolio to stocks,

you have to decide what type of stocks you want to own. In
this section, we’ll discuss the different categories and types of
stocks in which you can invest. Different categories of stocks

offer varying levels of risk and return.

Large-Cap, Mid-Cap, or Small-Cap?

Stocks are often categorized by the size of the company,
or “capitalization.” Market capitalization is calculated by

multiplying the number of a company’s shares outstanding by

its price per share.

The three major stock categories are large capitalization (large-

cap), mid capitalization (mid-cap), and small capitalization
(small-cap). These categories differentiate the varying levels of
growth a company may have, the value of its stock, and how

much risk may be involved with investing in that company.

Chapter 3: You Must Have Growth In Your Portfolio