LARGE CAP STOCKS AND MUTUAL FUNDS
Though the majority of stocks are actually found in smaller caps, large cap stocks are better known and thus hog most Wall Street's attention. Then practice what you've learned with our free stock market simulation.
LARGE CAP STOCKS LIST
|GOOG||Alphabet Inc. (Google) Class C|
|GOOGL||Alphabet Inc. (Google) Class A|
|BRK.B||Berkshire Hathaway Inc.|
|BRK.A||Berkshire Hathaway Inc.|
|BABA||ALIBABA GROUP HOLDING LTD.|
|JNJ||JOHNSON & JOHNSON|
LARGE CAP MUTUAL FUNDS LIST
|AGTHX||American Funds Growth Fund of Amer A|
|CGFAX||American Funds Growth Fund of Amer 529A|
|CGFCX||American Funds Growth Fund of Amer 529C|
|CGFEX||American Funds Growth Fund of Amer 529E|
|CGFFX||American Funds Growth Fund of Amer 529F|
|GFACX||American Funds Growth Fund of Amer C|
|GFAFX||American Funds Growth Fund of Amer F1|
|GFFFX||American Funds Growth Fund of Amer F2|
|RGAAX||American Funds Growth Fund of Amer R1|
|RGABX||American Funds Growth Fund of Amer R2|
WHAT ARE LARGE CAP STOCKS?
Large cap refers to large market capitalization. “Large Cap” is a term used by the investment community. Cap size has changed over time, so it’s important to take scaling into consideration. What was considered a big cap stock thirty years ago is very much a small cap stock today. Commonly referred to as blue chip stocks, the largest publicly traded companies have a cap of $10 billion or greater. They’re usually the best-known companies traded in the public market (Apple, Walmart, Facebook etc). Wall Street's attention is concentrated heavily on these giants because it’s where the lucrative investment banking business resides – but the majority of stocks are actually found in the smaller (and riskier) caps.
Fun fact: AAPL recently shattered records by hitting a market cap of $775 billion!
WHAT ARE LARGE CAP MUTUAL FUNDS?
Large cap funds consist of companies with market caps of $8 billion or more. Mutual funds actually have restrictions on the level of ownership they can have in any one company (generally no more than 10% of their outstanding shares), so oftentimes these funds are forced to imitate a larger index. This usually forces the big cap funds to purchase large companies – the same companies that make up the major market indexes. There are lots of large cap income funds that are awesome for risk-averse investors. Investors with large time horizons tend to rely on more passive investing strategies. Large cap mutual funds would be appealing to these guys, as they usually aim to buy and hold. When picking between a small, medium or large cap mutual fund, make sure to take into consideration not only its size but also in which investing style the fund specializes.
FINDING THE BEST LARGE CAP STOCKS TO BUY
Blue chip stocks should be a part of any properly diversified portfolio. Many think that these massive stocks are too conservative, but they still see incredible amounts of trading and speculation on a daily basis. Even these huge companies see price fluctuations that cause investors to panic or cash out. Here are the main reasons why you want to get your hands on some large cap stocks:
Their size makes big cap companies relatively stable compared to smaller caps. They’re much less likely to go under, but their growth rate is sluggish in comparison. These companies are typically market leaders, so while it’s difficult for them to grow as quickly as up-and-comers, they are the much safer investment.
Large cap stock companies are much more likely to pay dividends. They know the stock price isn’t likely to appreciate in value as quickly as a growth company’s. Big cap companies are super profitable, yes. But they simply don't have the same opportunity to grow. Their stock price remains relatively stagnant, so they pay back dividends in order to compensate their investors.
During the inevitable downturn in the business cycle is when large cap companies are extra hot. These whales aren’t necessarily immune to recessions, but they’re certainly more stable in the face of one. Dividend payments are also an attractive source of income when bond yields are low.
WALL STREET SURVIVOR'S BEST OF THE BEST LIST
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- Shopify (SHOP) – April 2, 2020 pick and it is already up 70.5%
- Zoom Video (ZM) – March 19, 2020 pick and it is already up 21.2%
- DexCom (DXCM) picked Feb 20, 2020 right before the market crashed and it is still up 7%
- Tesla (TSLA) picked January 2, 2020 before the crash and it is up 75% compared to the SP500 -11% so it is ahead of the market by 86%
- HubSpot (HUBS) picked December 5, 2019 and it is down 5%
- Netflix (NFLX) picked November 21, 2019 and it is up 36%
- Trade Desk (TTD) picked November 11, 2019 and up 19%
- SolarEdge (SEDG) picked September 19, 2019 and it is up 10%
- Zoom was also picked October 3, 2019 and it is up 95% since then.
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