Introduction to Small, Mid, and Large-Cap Stocks

You may have heard the terms small-cap, mid-cap, or large-cap in your reading about stocks and the companies that issue them. The term cap stands for capitalization and refers to the value of a company.

Stock is often classified by small, mid-size, or large company size. Sometimes the stocks of different-sized companies offer investors better opportunities than stock of larger or smaller firms. Understanding stock capitalization will help you make better investment decisions when put into the perspective of the economic climate in which you invest.