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Don’t Make Me Say I Told You So 95
► Many mid-caps have higher cash flows and earnings
growth compared with large-cap companies
Mid-cap stocks are sometimes left out of the discussion as
people try to decide between investing in large- or small-caps.
Mid-cap stocks comprise about 25% of domestic stocks, but,
according to Morningstar, only 15% of mutual fund assets are
invested in mid-cap stock funds. Mid-caps outperformed both
large-cap and small-cap stocks from 1992 to 2017, and also
performed better than the other stock classifications in most of
the rolling periods within this 25-year span.
Small-Cap Stock Benefits:
► Greater potential for growth
► Lower stock price allows you to buy more shares
► Greater chance to diversify holdings, due to lower stock
price
When it comes to return and growth potential, mid-cap stocks
have the advantage over both large-cap stocks and small-cap
stocks.
Chapter 3: You Must Have Growth In Your Portfolio
