Question

Investing in mid-cap and large-cap companies means _________________________.

Answer 1

Investing in mid-cap and large-cap companies means allocating capital to established businesses with significantly larger market capitalizations, which typically offer greater stability, increased liquidity, and a proven track record of performance compared to smaller companies. Mid-cap companies generally have market capitalizations between $2 billion and $10 billion, while large-cap companies have market capitalizations exceeding $10 billion. This investment strategy can provide potential for long-term growth and dividends, while also reducing overall portfolio risk compared to investing solely in small-cap companies.