Mid-cap stocks refer to companies with a moderate market capitalization, falling between small-cap and large-cap stocks. Market capitalization is calculated by multiplying the total number of outstanding shares by the current market price per share. While there is no standardized definition, mid-cap stocks generally have market capitalizations ranging from a few billion dollars to tens of billions.

Investing in mid-cap stocks offers a middle ground between the potential for growth seen in small-cap stocks and the stability associated with large-cap stocks. Mid-cap companies are often in a phase of expansion and growth, with the potential to generate higher returns than more established large-cap companies. They may have established market positions, innovative products or services, and the capacity to capture new market opportunities.

However, mid-cap stocks also carry a higher level of risk compared to large-cap stocks. They may be more sensitive to market volatility and economic downturns. Furthermore, mid-cap companies may have limited resources compared to their larger counterparts, which could impact their ability to withstand challenging market conditions.

Investors interested in mid-cap stocks should conduct thorough research, considering factors such as financial performance, competitive advantages, management quality, and industry outlook. Diversification within a portfolio is crucial to mitigate the inherent risks associated with investing in mid-cap stocks.