These stocks have market capitalizations ranging from $2 billion to $10 billion. Generally, they are more growth-oriented than the large-cap stocks but are more stable than the small-cap stocks. Most mid-cap firms have passed through a growth phase where the businesses expand their market shares as well as develop new products. Investors in mid-cap stocks will get a good mix of growth and stability, making it suitable for those who are willing to undertake a moderate risk.
Small-cap stocks Small-cap stocks refer to firms whose market capitalization is less than $2 billion. In general, these firms either specialize in a niche market or in a developing industry, hence, tremendous growth opportunities might be seen in such markets. But, at the same time, they are also prone to economic downtrends and market volatility. Therefore, such small-cap stocks might bring out a lot of returns but at a riskier proposition and thus it suits more aggressive investors wanting to get maximum growth from investments.