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Diversifying across  Various Market Caps
What are market caps ? <ul><li>Market capitalization or market cap is the product of the current market price of a particu...
Market cap categorization <ul><ul><li>Generally, stocks are categorized as  large-caps ,  mid-caps  and  small-caps  on th...
Market caps <ul><li>The risk factor </li></ul><ul><ul><li>The risk associated with the stocks in one category is generally...
Market caps <ul><li>Investment Horizon </li></ul><ul><ul><li>The ideal time frame or investment horizon while investing in...
Market caps <ul><li>Market Cap to Sales ratio </li></ul><ul><ul><li>The market cap to sales ratio is a tool that can be us...
Thank You! <ul><li>Questions? Feedback?  </li></ul><ul><li>Click on any of these - </li></ul>Twitter Facebook Website Read...
<ul><li>Registered office: Kotak Securities Limited, 1st Floor, Bakhtawar, 229, Nariman Point, Mumbai - 400021. SEBI Regis...
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Diversifying across various market caps

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Market cap is the total value that the stock market assigns to a company

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Diversifying across various market caps

  1. 1. Diversifying across Various Market Caps
  2. 2. What are market caps ? <ul><li>Market capitalization or market cap is the product of the current market price of a particular stock and the total outstanding shares in the market </li></ul><ul><li>Market cap is the total value that the stock market assigns to a company </li></ul>
  3. 3. Market cap categorization <ul><ul><li>Generally, stocks are categorized as large-caps , mid-caps and small-caps on the basis of their market capitalization </li></ul></ul><ul><ul><li>There is no fixed formula or threshold limits which define the categorization of stocks but the general limits are : </li></ul></ul><ul><ul><li>- Over 5,000 crore is regarded as Large Cap </li></ul></ul><ul><ul><li>- 1,500 Crore to 5,000 crore is known as Mid Cap </li></ul></ul><ul><ul><li>- Less than 1,500 crore falls under Small Cap </li></ul></ul>
  4. 4. Market caps <ul><li>The risk factor </li></ul><ul><ul><li>The risk associated with the stocks in one category is generally different from that of stocks in another category </li></ul></ul><ul><ul><li>Risk and market capitalization are negatively correlated </li></ul></ul>
  5. 5. Market caps <ul><li>Investment Horizon </li></ul><ul><ul><li>The ideal time frame or investment horizon while investing in various categories of stocks is different for each category </li></ul></ul><ul><ul><li>Though investors are always encouraged to invest for the long term, in the case of small and mid cap stocks, a long investment horizon gains further relevance as such stocks tend to perform after a longer period of time </li></ul></ul>
  6. 6. Market caps <ul><li>Market Cap to Sales ratio </li></ul><ul><ul><li>The market cap to sales ratio is a tool that can be used to check the valuation of a stock </li></ul></ul><ul><ul><li>It must be used in the right context </li></ul></ul><ul><ul><li>Only companies from the same or similar sectors should be compared when using this tool </li></ul></ul>
  7. 7. Thank You! <ul><li>Questions? Feedback? </li></ul><ul><li>Click on any of these - </li></ul>Twitter Facebook Website Read More
  8. 8. <ul><li>Registered office: Kotak Securities Limited, 1st Floor, Bakhtawar, 229, Nariman Point, Mumbai - 400021. SEBI Registration No: NSE INB/INF/INE 230808130, BSE INB 010808153/INF 011133230/INE 011207251, OTC INB 200808136, MCXSX INE 260808130. </li></ul><ul><li>Disclaimer: Investments in securities are subject to market risks, please read the SEBI prescribed Combined RDD prior to investing. </li></ul><ul><li>* Awarded Best Brokerage Firm in India by AsiaMoney in 2006, 2007, 2008 and 2009 </li></ul>

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