Small- and Mid-Cap Stocks: Bigger Isn't Always Better

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It seems as if you are invested in a small cap stock that when the market is down the investers are less likely to bail out. Thats my opinon.

Small- and Mid-Cap Stocks: Bigger Isn't Always Better


By Cathy Smart
401k Forum Analyst


Introduction

Related LinksMore About Diversification

Large-Cap Stocks
Sometimes, investment terminology is tossed around without really being explained…large-cap, small-cap, mid-cap - what exactly do they mean? The investment analysts at 401k Forum have decided to help you get down to basics with a series of articles about the different asset classes.
First of all, let's define asset classes. They're the categories that your different investments fall into - basic ones include cash, bonds, large-cap stocks, small-cap stocks, and international stocks, though there are a number of other more specific permutations. Studies have shown that the key to successful investing is to spread your wealth among different asset classes.
Because large-cap stocks have shown outstanding performance recently, you may have heard that investing in them would have been your best bet. But do large-cap stocks ALWAYS perform better than mid-cap and small-cap? Let's take a look.

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