What Are Large-Cap Stocks And 5 To Buy Now

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Large-cap stocks can be a great and useful part of an investment portfolio if you understand the part they can play and what they can't do.

you understand the part they can play, what they can’t do, and how to maneuver through some confusing and changing information.This question should be the easiest to answer. It starts with the concept of market capitalization, usually called the market cap, which is a measure of a company’s size, calculated by multiplying the number of outstanding shares times the current price per share. The number can vary over time, even one day to the next.

But a quick look at the S&P 500 and you’ll see the variance within stocks labeled as large-caps. For example, financial services and bankMcCormickLarge-Cap Vs. Small-Cap Stocks Small-caps would have done better, returning $49,052 on that single dollar. But they are more volatile, with larger swings on the whole, and require more attention.

One of the advantages to look for is a solid and stable balance sheet, with plenty of cash and manageable to low levels of debt. A good history of dividends can be a good sign that value is getting passed to investors. “A company paying a 3% dividend only needs a 7% return through stock appreciation to get double-digit returns,” VanTimmeren adds.

You can get a mutual fund or exchange-traded fund that holds a mix of stocks to look like an entire index like the S&P 500. Or you can look for an equally weighted S&P 500 index fund or ETF that will be more diversified because it depends less on the performance of the one index.Best Large-Cap Stocks to Buy Now

 

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