Mid-Cap Companies: Mid Cap Growth Stocks

Mid Cap Growth.

A mid cap company is a firm that has a market capitalization of between $2 and $10 billion. Mid Cap Growth refers to the stocks of Mid Cap companies whose primary focus is growth through reinvestment rather than dividend payouts.

Investors commit their money to these stocks for the long term with an anticipation of capital gains that exceed dividend payouts. Consequently, they may not be the best choice for investors with high liquidity needs such as those nearing retirement. On average, the holding period for a Mid Cap Growth stock is between 5 years and 10 years.

In regards to risk, these stocks are less risky than Small Cap Growth Stocks but riskier than Large Cap Growth Stocks. Given the relationship between risk and

This makes them riskier than the former and less risky than the latter. However, value stocks, in general, have lower volatility than growth stocks.

Investors can buy Mid Cap Value stocks individually or through mutual funds. Given the level of risk attached to these stocks, less savvy investors should seek professional help from professional or invest through mutual funds.

Small Cap Value.

Small Cap value refers to a strategy where a company with a market capitalization below $2 billion sells its stock at a price below its fundamental value.

Like any other asset class, Small Cap Value stocks have their advantages and disadvantages, and therefore their suitability in a given portfolio depends on the investor's risk appetite.

According to Fama and French's three-factor model, small cap stocks tend to perform better than middle cap and large cap stocks because they have more room for growth.

Small cap value stocks are at a greater advantage since they are usually undervalued and therefore have a high chance of increasing in price when compared to growth stocks. These shares carry a high risk which is the tradeoff for the high

This makes it hard for them to access capital which is vital for growth.

Also, the fact that Small Cap Value companies do not invest in growth makes their stock less glamorous to investors. As a result, the issuer must undervalue them to attract investment.

Small Cap Value stocks are also known to have high volatility especially in times of global economic uncertainty. Small Cap stocks, in general, are known to have high volatility than medium and large cap stocks. Given the level of risk involved in Small Cap stocks, Investors who buy them tend to be highly sensitive to information hence the volatility in times of global uncertainty.

Investors looking to invest in Small Cap Value can buy individual stocks or invest through mutual funds or ETFs. Proper due diligence is necessary before investing to ensure that only the best stocks have been chosen. For less experienced investors, mutual funds are the best option.

REITs.

Real Estate Investment Trusts or REITs refer to investment vehicles that invest in real estate specifically in properties and mortgages. REIT companies buy and develop properties not to resell them but to keep them as part of their investment portfolio for long-term