Your financial advisor may mention that your portfolio includes small cap stocks or large cap stocks. Understanding the difference is an important aspect of managing potential risks and expected returns for your investments.
The world of equity investing can be overwhelming. There are many classifications of equities that investors may consider when investing: one of which being the market capitalization of stocks (commonly referred to as “market cap”), which is used to designate the size of a company. A company’s market cap is an important consideration that can have a meaningful impact on the performance of your portfolio. The stability of business operations and end market exposures are just a few important factors that vary depending on the size or market cap of a company.