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Large Cap Definition

Large cap refers to companies with market capitalization of the stocks with market values greater than $10 billion. Examples of large cap companies include, J.P. Morgan, IBM, and Johnson & Johnson. 

What Are Large Cap Stocks?

Large cap stocks are shares that trade for corporations with a market cap of over $10 billion. Additionally, large cap stocks represent most of the U.S. equity market. Therefore, theses stocks are often viewed as core investments to include in a portfolio. 

Large Cap vs Small Cap

Defining a company with the terms, ‘large cap’ or ‘small cap,’ refers to how much value they have in the public eye in terms of market capitalization. Large cap stocks, also known as big cap stocks, are shares of companies with a market cap of over $10 billion. These companies are key players in well-established industries and have been in the markets for a long period of time. Investing in large cap companies don’t bring a lot of returns in the short term, but rather in the long term as companies reward consistent investors. Small cap stocks are shares of companies with a market cap of between $300 million and $2 billion. These companies are young and are usually in a niche industry. Therefore, investing in small cap companies are more risky, more volatile, and bring in less liquidity.

Are Large Cap Stocks Safe?

Large cap stocks tend to be more established in their markets with a long term history which can make them a safer choice than small or mid-cap companies who may just be starting out. Large cap stocks are also less volatile during rough markets and are seen as core portfolio investments.

 

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This information should not be construed as a recommendation, offer to sell, or solicitation of an offer to buy a particular security or investment strategy. The commentary provided is for informational purposes only and should not be relied upon for accounting, legal, or tax advice. While the information is deemed reliable, Wealthspire Advisors cannot guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with regard to the results to be obtained from its use. ©2021 Wealthspire Advisors

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