What is a market capitalization?
Another way to diversify your stock holdings is to invest in funds that focus on companies of a particular size. Size in the stock market is measured by market capitalization (often referred to as market cap), which is the total market value of a company’s issued and outstanding stock. Large cap funds tend to hold the stock of well-known companies, such as IBM or Coca-Cola. Conversely, small cap funds are likely to invest in more obscure companies serving a market niche not often visible to the consumer.
