Focus on better risk management: 5 midcap stocks from different sectors with the right financial matrix (2024)

FAQs

What are the best mid-cap stocks to buy now? ›

Mid-cap stocks have historically outperformed large- and small-cap stocks over the long run and with less risk than small caps. Investors lacking mid-cap exposure may be missing out on the diversification potential of a key segment.

Investors interested in mid-cap stocks should consider the quality of revenue growth when investing. If gross and operating margins are increasing at the same time as revenues, it's a sign the company is developing greater economies of scale resulting in higher profits for shareholders.

Mid-cap companies are those companies that have a market capitalization between RS 5 - 20,000 crores. Investing in mid-cap companies is risky than investing in large-cap companies because they tend to be volatile. The companies ranking from 101st to 200th are called mid-cap companies in terms of market capitalization.

Understanding Asset Allocation and Mid-Cap Stocks

Mid-cap stocks serve an important role in a well-diversified portfolio as they blend some of the best attributes of their smaller and larger counterparts: Delivering attractive returns historically with relatively low risk and volatility.

Mid cap equity fund are usually considered more risky than large-cap funds, but less risky than small-cap funds.

Choosing between Large-cap and Mid-cap Mutual Funds depends on your risk tolerance, investment horizon and financial goals. Always consider the Large-cap vs Mid-cap factors before investing. Large-cap Funds offer stability, while Mid-cap Funds offer growth potential with higher risks.

Aggressive Investor: A risk-taking investor can think about investing 50–60% of their portfolio in large-cap stocks, 15–25% in mid-cap stocks, and the remaining 15–25% in small-cap stocks.

Volatility: Mid-cap stocks can be more volatile than large-cap stocks, with their prices subject to significant fluctuations. Liquidity: In some cases, mid-cap stocks may have lower trading volumes, making it more challenging to buy or sell shares, particularly in large quantities.

Which mid-cap share to buy today for short term? ›

Average PE of Nifty in the last 20 years was around 20. * So PEs below 20 may provide good investment opportunities; lower the PE below 20, more attractive the investment potential.

Mid-cap stocks generally fall between large caps and small caps on the risk/return spectrum. Mid caps may offer more growth potential than large caps, and possibly less risk than small caps. Small-cap stocks tend to be, on average, least developed publicly traded companies, although there are exceptions.

India's small and midcap share indexes lost about $47 billion in combined market value this week after the country's markets regulator raised concerns about 'froth' and suggested mutual funds limit lump sum investments.

Individuals who are willing to take higher risks for greater returns should invest in mid cap funds. This is because, in the short to medium term, these fund schemes can be highly volatile. However, the high risks also provide the opportunity to gain market-beating returns.