In this video, you will learn about mid cap stocks and their advantages and disadvantages.
#midcapstocks #marketcapitalization #wallstreetmojo #stocckmarket #investing
Chapters:
00:00 – Introduction
00:41 – What are mid cap stocks?
01:33 – Advantages
02:30 – Disadvantages
03:05 – Important points to note
03:49 – Conclusion
What are mid cap stocks?
Mid cap stocks refer to companies that have a market cap of $2 billion to $5 billion.
These mid cap stocks often get high demand from investors due to the fact that these companies have great growth potential and have already proven that their business model works.
(Explained in detail in the video)
Advantages
Mid cap stocks often outperform the overall market and other stocks like small cap and large cap stocks.
Compared to small cap stocks, mid cap stocks are less risky and volatile.
Finally, large cap and mega cap companies often look out for high-performing mid cap companies for acquisition.
Disadvantages
Mid cap stocks may be less risky than small cap stocks, but it is riskier and less stable than large cap stocks.
Also, since these companies are relatively still small, they may not have the capital to survive an economic slump, and there’s always the possibility of the company going under.
Mid cap stocks also face liquidity issues at times, and if you’re looking to invest in these companies, then you might not get it at a good price.
Important points to note
Mid cap stocks are for those investors that are looking for large returns and aren’t looking for stable returns.
Also, it is advised that investors should not allocate a lot of their capital to such risky financial assets. Mid cap stocks should take up only a small part of one’s portfolio.
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