Market capitalization, or “market cap,” is the total value of a company’s outstanding buy chewy shares. Investors often compare small-cap vs large-cap stocks when building portfolios. Each category offers unique advantages.
**Large-cap stocks**
Large-cap companies include firms worth hundreds of billions. They are long-term performers.
Benefits:
– Lower volatility compared to smaller firms.
– Diversified revenue streams.
Risks:
– Slower growth.
**Small-cap stocks**
Small-cap firms are younger companies. They are often found in niche sectors.
Benefits:
– High growth potential.
– Can deliver significant returns.
Risks:
– More vulnerable to downturns.
– Liquidity issues.
**Conclusion**
Smart portfolios combine large-cap stability with small-cap growth. Holding Apple and a fintech challenger allows investors to capture both resilience and opportunity.
