What Is Mid Cap?
Mid cap is a term used to describe companies with market capitalizations between $2 billion and $10 billion. These companies are generally considered to be in the middle of the pack when it comes to size, falling between large-cap stocks (market caps over $10 billion) and small-cap stocks (market caps under $2 billion). Mid cap stocks tend to offer investors more growth potential than their larger counterparts, but also come with higher risk due to their smaller size.
Investing in mid cap stocks can provide an opportunity for diversification within a portfolio as they often have different characteristics from both large and small cap investments. They may not move as quickly or dramatically as smaller companies, yet still offer greater upside potential than larger ones. Additionally, mid caps typically have access to better resources such as research & development capabilities that allow them to compete on a global scale while still maintaining some degree of stability compared with other types of investments.