Market capitalization (market cap) is the total dollar value of a company's outstanding shares: share price × shares outstanding. A company with 100 million shares at $50 has a $5 billion market cap. Companies are classified by market cap: mega-cap (>$200B: Apple, Microsoft), large-cap ($10-$200B), mid-cap ($2-$10B), small-cap ($300M-$2B), micro-cap (<$300M). Each tier has different risk and return characteristics: small-caps historically offer higher long-term returns with higher volatility. Total-market index funds (VTI, ITOT) cap-weight all sizes, so most of your exposure naturally goes to large companies.
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Market Capitalization
August 22, 2026 · Aditya Gupta
Investing
Related terms
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A 401(k) is an employer-sponsored retirement plan where employees contribute pre-tax salary that grows tax-deferred until withdrawal. The…
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