Blue-chip stocks represent large, well-established companies with a history of stable earnings, strong financial positions, and reliable dividend payments (e.g., Apple, Microsoft). These stocks are considered low-risk due to their market dominance and financial stability, but may offer slower growth.

Mid-cap stocks refer to medium-sized companies with market capitalisations typically ranging from $2 billion to $10 billion. They offer a balance of growth potential and moderate risk, as they are more established than small-caps but still have room for expansion (e.g., Chipotle, Etsy).

Small-cap stocks are shares of smaller companies (under $2 billion market cap) with high growth potential but higher volatility. These firms are often in early growth stages, making them riskier due to limited resources, lower liquidity, and vulnerability to economic downturns (e.g., emerging tech or biotech firms).

Risk Comparison:
Blue-chips: Lowest risk, stable returns.

Mid-caps: Moderate risk, balanced growth.

Small-caps: Highest risk, high reward potential.

Investors often diversify across these categories based on risk tolerance—blue-chips for safety, mid-caps for growth potential, and small-caps for aggressive growth