Investing in large-cap stocks is an essential part of a well-diversified investment strategy. The companies in this asset class are often well-established and have a track record of stability and consistent performance.
When new clients first come to our firm, we often find their portfolios packed with large-cap stocks, companies that are valued at more than $10 billion. These are the companies that comprise the S&P 500. Although large-cap stock is a good place to start, once you begin to build a portfolio, it is essential to include small-cap stocks with $300 million to $2 billion in market cap. These companies are much smaller, so they have more significant potential to deliver outsized returns than larger companies.
A banking crisis, the debt ceiling, recessionary fears, and increasing global tensions are reasons investors are fearful. Yet you may have noticed that the US stock market has been acting kind of strange lately. So, let’s talk about what is happening with the US stock market – specifically large-cap stocks – many people think of the S&P 500.