dani face dani quote

Explosive Small, Mid Caps?

Hey 5-Star Trader,

There are many ways to look at the market. You can compartmentalize it by breaking it down into sectors or compare the different indexes to judge its sentiment. But what if you want to compare the overall health and consistencies of one company to another? Knowing which sector they are in won’t help. 

That’s why when I am comparing companies one of the things I do is consider whether they are a large, mid, or small cap. 

But what is a large, mid, or small cap?

When classifying a company into one of these three buckets we have to consider its market capitalization: 

  • Large cap companies are considered to have a market capitalization of $10 billion or higher.
  • Mid cap companies are considered to have a market capitalization between $2 billion – $10 billion.
  • Small cap companies are considered to have a market capitalization of $300 million – $2 billion.

Why do I care about a company’s market value?

When looking to add to my long-term portfolio I always want to consider the risks involved and a good way to determine this is through their market value. 

Large cap stocks are generally very expensive, but because their market value is so high, they tend to be stable picks. They’re usually leaders in their field and are well known so the risk is low.

Small to mid caps are companies that are not as well established as large caps. This makes them a riskier pick, but it provides investors a unique opportunity to get in on companies when they are in their core growth stages (before their potential takes off). That coupled with the cheaper price tag makes them an absolutely essential part of my portfolio.

Want to learn more about what’s in my portfolio? Catch the replay of my free webinar. There I will show you how I build my portfolio and beat the S&P 500.

Up Next...

Scaling Out Contracts…

Hey 5-Star Trader, “Tuesday Trade” Journal: One of the most important concepts in trading is to review your work, and learn from the good and the bad. Identifying what is working is critical — to do more of it. So, to lead by example, each Tuesday, you’ll get a trade from my trading journal, in … Read more

Read More

Days To Expiration…

Hey 5-Star Trader, It is impossible for us to know exactly what each day in the market will bring us, but there are certain days of the year that we know we should pay extra special attention to. Tomorrow is one of those days. Why? Because it’s quadruple witching hour.  What is quadruple witching hour? … Read more

Read More

Cutting Risk With SQ

Hey 5-Star Trader, “Tuesday Trade” Journal: One of the most important concepts in trading is to review your work, and learn from the good and the bad. Identifying what is working is critical — to do more of it. So, to lead by example, each Tuesday, you’ll get a trade from my trading journal, in … Read more

Read More

Subscribe Today!

Want to walk the path to trading success together? Join Danielle’s “Five Star Trader” E-Letter for market insights, tips, tricks, and special bonuses.

Sign Up Now
all-as-seen-on-logos