A key characteristic that has an impact upon stock market returns is company size. Smaller companies tend to be more unstable than larger companies, which ultimately makes them riskier investments.
Smaller companies tend to be more volatile that larger companies. This means that the stock price of a small company can increase and decrease more drastically than larger companies.
A small firm on the stock market is generally viewed as a company that has a market cap between $300M and $2B. While companies with a market cap of more than $10B are seen as large companies.
Large companies tend to grow slowly but consistently, while small companies can grow very quickly. It is possible to make a lot of money investing in small companies but they are much more likely to go bust.
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