Last week on the podcast, we discussed growth vs. value stocks. Today on the Finance Flash Go! podcast recap, it’s trap or cap time. Ready to explore the difference between small, mid, and large cap stocks? Let’s go!
(If you need a refresher on stress free stock investing, check out this post)
A stock’s “cap” refers to its relative size in the market.
Large cap refers to a company with a market capitalization value of greater than $10 billion.
Market capitalization is calculated by multiplying the number of a company’s shares by its stock price per share.
A company’s stock is the generally classified as large cap, mid cap or small cap.
Mid is the next size down and small is obviously the smallest.
It’s just a size thing and bigger is not always better (no puns intended!).
It’s really as simple as that. That is what the “cap” means when it comes to stocks. Pretty arbitrary is you ask me, but it’s important to be speaking the same language when discussing finances with others!
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