A successful self trader – Rule # 7
A mid-cap stock is hard to define, but there are some standards set. Globally, it’s a mid-cap stock if it has a market cap between $2 billion and $10 billion. The relevant numbers in India will be obviously smaller. These mid-cap stocks become important because they constitute a much larger share of trading volumes; disproportionate to their size. And retail interest in mid-cap stocks is huge.
Getting your mid-cap strategy right…
If you want to understand the importance of mid-cap stocks, just look at the NSE CNX Mid Cap Index. Launched in 2005 with a base date of January 01st 2003 and a base value of 1000, this index has grown around 13 times during this period. The frontline Nifty has grown a little over 8 times during the same period. This outperformance lies at the core of why mid-caps need better understanding. Continue reading