What is large cap stock?
Large-cap stocks are companies listed on the stock market that have a market capitalization of over INR 20,000 crores. These high-value stocks are typically made up of established and well-performing companies that have been functional for many years. As these stocks tend to be relatively stable, large-cap investments can be seen as an easy option for investors who would like to safeguard their money while still making good returns.
How to identify large-cap stocks?
Identifying large-cap stocks can be critical for investors seeking long-term market stability and a steady source of income. Large-cap stocks with a market capitalization in excess of INR 20,000 crores, represent giants of the market, generally highly diversified companies that present low volatility. To identify large market capitalization stocks, research market indices for securities that exceed the threshold market value. Policing this area regularly will help ensure that your portfolio includes the largest entities in the market and a reliable base of investments.
Why are large cap stocks less volatile?
Large market cap stocks are less volatile investments because they are usually associated with established companies that can consistently bring in revenue over the long term. Higher market capitalization stocks tend to be less volatile due to their market size and revenue stability making them an attractive option for investors seeking an opportunity with less risk.