What does "market capitalization" mean, and is that an important factor in deciding whether to buy a stock?
Market capitalization refers to the size and usually the maturity of the company. The market is generally divided into Large, Mid and Small cap sectors. The Large cap stocks tend to have more dividends and less focus on growth. The Small cap stocks tend to have no dividends with all the focus on growth. Mid caps have a blend.
Diversification between market sectors can provide a portfolio a more consistent return than attempting to choose the sector that is increasing in value.
92% of the return on your investment is a function of the asset class that you choose to invest in. | 10.30.13 @ 20:33
In very simple terms, market cap is the current value of a firm.
Here is the equation:
Total # of shares outstanding X the current price/share = market cap
Yes, it will go up,down and sideways. The most important factor when buying a stock is to not lose money.
Here is a question for you:
What is the stocks Intrinsic value?
There are various methods to dive deeper into this. Keep in mind GIGO-Garbage In Garbage Out.
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It's not what you make, it's what you keep that determines your lifestyle.
| 03.17.16 @ 21:08