Performance cycles

Stocks of different sizes also tend to follow different performance cycles. For instance, smaller-cap stocks may go up in value at a time that large-cap stocks remain flat or go down, or vice versa. And following a period in which one category outperforms the others, the situation typically reverses.

Capitalization	Where to get information	Volume of trading	Speed of trading	Risks & rewards

Large-cap (Companies with capitalizations of more than $5 billion)	The Dow, S&P 500 Extensive media and brokerage attention	Large	Rapid	Comparatively high prices, though little risk of company failure May pay dividends Sometimes limited growth potential

Mid-cap (Companies with capitalizations of more than $1.5 billion)	Mid-cap indexes Some media and brokerage attention	Large	Rapid	Potential for growth greater than for larger companies, but so is the risk for loss

Small-cap (Companies with capitalizations of less than $1.5 billion)	Russell 2000 index Limited media coverage attention	Potentially small	Potentially slow	Big gains possible Higher risk from company failure or poor management

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