Blue Chip or Micro Cap?

Large Cap or Small Cap

This post will be on large cap verse small cap and a few pros and cons about both types of stocks. 

Large cap stocks generally have a market capitalization of 10 billion dollars or more. 

Pros

1. Long term stability
2. The dividend payout you receive if they have one
3. More research has been done on them, usually very valuable
4. Not too aggressive of growth
5. Steady income

Cons

1. Not as aggressive as small cap 
2. Lower return
3. Not as much ownership 
4. You can lose money (just as with any other stock or investment)

A few large cap company names are

1. General Electric
2. Apple
3. Google
4. Facebook

Now, for the Small Cap, when I say micro cap I'm talking between between 200 million and and 2 billion dollars. 

Pros

1. Can be more profitable than buying large cap (10 billion or more)
2. Grow more quickly
3. Diversification in a portfolio
4. More focused than a large cap

Cons

1. Lack of analyst coverage 
2. Thin markets for the company
3. Volatility, not every investor enjoys that
4. Some may be penny stocks (trading less than 5 dollars per share)
5. Dividends are hard to come by

A few small cap are

1. Five Below
2. yelp
3. Groupon

I hope these posts have been helping even in the slightest bit, I enjoy writing them. I am learning more just as you are.

https://www.facebook.com/chrisbartoinvesting/

Chris Barto