Are small cap and mid cap stocks the best to invest in since they give both of Blue Chips & Penny Stocks?
Small Cap and Midcap are kind of a hybrid between Penny Stocks and Blue Chips. So is this the quickest way to build wealth and less risky since they’re out of the penny stock zone?
I wouldn’t say there is a “best” type of stock. Just good companies which are also at good prices.
Small Cap and Midcap just denote the size of the company. A company can be smaller, yet have existed for 50+ years. These wouldn’t be all that risky, but that doesn’t mean you will make a lot of money. Not all companies become blue chips, some will stay in the small to midcap range and can still be great companies to buy.
I don’t like considering them a “hybrid” between those two. They categorize companies by size of company from very small to very large, with the cap denoting how much “value” this company has on the open market.
It is true that smaller companies usually do have more growth potential, and are also likely to be more volatile. However, I wouldn’t consider the entire group of small caps to be better then blue chips, or vice versa.
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