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What does “cap” mean?
Large cap and small cap are bond indexes that are different and that track the prices of bonds. “Cap” here refers to capitalization, which means how much money has been invested or grown in a company. When we say large cap, we mean large capitalization. We mean large amounts of value or money in the company.
What’s the largest, large cap stock?
The largest, large cap stock changes from time to time. Do you have some ideas? Walmart, Apple, Pfizer, Facebook. Let’s see who it’s going to be today. Tech brands like Microsoft, Apple, Amazon, and Google. Market cap is Apple with $2 trillion. I know these are small. They’re small in size here, but that’s its market cap, 2 trillion for Apple. 1.9 trillion. Microsoft has 1.6 trillion. Amazon has 1.6 trillion in market capitalization. That’s how much the market values that company.
What’s a small cap company?
A small cap is a tiny company comparatively. It does not have as much investment. It is not valued as much. The way you calculate this is shares. Do you know? What’s the shares multiplied by? Shares times price. So when we were looking at Apple stock over here, we’re talking about, here’s their market cap, 2.2 trillion today. We would take $120 and multiply that by all the shares outstanding. So that’s going to be the difference.
Will large cap or small cap be more volatile in price?
Most people think the small caps will be more volatile. Let’s take a look in the real world. So, blue line is the small cap. Let’s lay on top of them, a large cap fund. We’re going to make large, green. That one just started. So the large caps are doing a little bit better, but they’re also a little less volatile. So your small caps move more. More growth opportunity.
Large caps recently had been doing really well, driven primarily by those tech companies. Another term for the large cap could be called blue chip. But here’s another, the large companies have done better more recently. But you can see bigger swings in the small caps.
