Size Matters....but only a little

Beware of the man who offers you a reward, in this life or the next.
J. Krishnamurti

Today, we talk about what kinds of stocks make sense in the equity portion of our portfolio.
Back in the beginning of this blog, I talked about BIG STOCKS, Medium Stocks, and small stocks. There's a reason for that. That's the only difference in stocks, capitalization. To reiterate, capitalization is the size of the company. It's measured by the number of shares outstanding times the most recent price. Big doesn't mean the price per share. One stock could be a large cap (BIG STOCK) and sell for $20 a share, and one stock could be a small cap, and sell for $50 a share.
BIGGER is NOT better, but it IS bigger. So lots of investment companies, mutual fund and the like, go for big, because they are, in general, easier to trade in large quantities.
BIGGIE stocks would include the ones in the Dow Jones Industrials, and the S&P 500 indexes.
Middle size stocks would be in the Russell 2000, which also includes some smaller fry,and the S&P mid-cap index.
There are also small-cap indexes and even teeeny tiny cap indexes, called microcaps.
These are worn by elves another wee-people, who like to dance and sing, but are frequently trodden underfoot by the clunky BIGGIES.
In sum, since you, me, or the man behind the tree can't tell which stock is going to 'outperform' any other stock, I strongly suggest you mix your stock portfolio with some BIG, some Middle and some small. Micro is great for miniskirts, not for stock portfolios, skip them.
Next which one of the size selections has done the best in the past(which I'll remind me and you, has nothing to do with the future. However, we have to start someplace.)