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What are Penny and Midcap stocks? Which type of investment is effective?

What are Penny and Midcap stocks?? How different? Investing in Penny or Midcap stocks is more effective? This article will guide you to distinguish Penny and Midcap stocks on the stock market today through the unique characteristics of each type in the simplest way.

What are Penny and Midcap stocks?

1. What is Penny Stock?

Penny is a stock with a smaller market capitalization than Midcap, so Penny is a Smallcap stock, also known as Nanocap. Regardless of the name, Penny stock is a stock that represents a new and small business in the market.

Therefore, Penny is a stock for long-term investors instead of short-term because:

  • Has a cheap listing price
  • Can invest in large amount
  • Likely to bring good profit in the long-term future

What are Penny and Midcap stocks? Through the information provided above, you must have had an overview of the two types of Penny and Midcap stocks. Next, let's compare the differences of 3 types of stocks: Penny, Midcap and Largecap!

What is Penny Stock?  Pros of Penny . stock
What are Penny and Midcap stocks? Pros of Penny . stock

2. What is Midcap stock?

On the current stock market, the types of shares when issued will be divided into 3 main types of stocks including: Smallcap, Midcap and Largecap. “Cap” is an acronym for the phrase “Capitalization” – market capitalization. Corresponding to the capitalization level, the terms related to the size: Small, Mid, Large combine to form 3 popular types of stocks on the stock market today.

Thereby, we can easily understand that Midcap in securities is a type of stock issued by an enterprise with a market capitalization in the medium form. However, investors now appreciate the potential of Midcap stock more and think that in the future it will replace the crown of Largecap stocks.

Therefore, Midcap has become a popular stock that is preferred by many investors. In addition to appreciating its potential, Midcap is a stock with a moderate price, suitable for investment with a large number of investors. large amounts.

  • Market capitalization is about 1 to 10 billion VND
  • The average share price is only from 30 to 70,000 VND/share.
  • Stable operation -> attractive profit for investors
  • Potential is highly appreciated, strong development in the future.
  • Have a sustainable market share
  • Most of the businesses are in the fields of real estate, transportation, electricity, etc., helping the growth rate to be strong and stable in the future.
What is Midcap Stock?  Advantages of Midcap stock
What is Midcap Stock? Advantages of Midcap stock

Penny, Midcap and Largecap stock comparison chart

1. Penny shares (Smallcap, Nanocap)

  • Risk level: High
  • Profit: Low
  • Liquidity: Low
  • Development potential: Depending on the business strategy of the enterprise
  • Stock Price: Cheap
  • Recognition: Low

2. Midcap stock

  • Risk level: Medium
  • Profit: Attractive
  • Liquidity: Medium
  • Growth potential: There is great growth potential
  • Stock price: Medium
  • Recognition: Medium

3. Largecap stock (Bluechip)

  • Risk level: Low
  • Profit: Stable
  • Liquidity: High
  • Development potential: Stable and sustainable
  • Stock price: High
  • Recognition: Large
Compare Penny, Midcap and Bluechip stocks
What is Midcap Stock? What is Penny? What is Bluechip? What type of investment should be?

What kind of stocks should I invest in? Penny, Midcap or Bluechip?

What are Penny and Midcap stocks? Which type of investment should be effective? Depending on your needs, plans and assessment of each type of stock, you can make the most appropriate decision. If you are a knowledgeable person about stocks and think that Penny shares in certain businesses have strong growth potential in the future, you can buy a lot of shares with a low capital.

But if you are a more confident person and quite afraid of the risks when investing in Penny stocks, you can consider investing in Midcap to limit your risk because this is a type of stock that is rated as has attractive profitability with a moderate amount of capital.

Bluechip is a suitable stock for those who have strong capital, want to invest in large enterprises with a foothold in the market and hope that this business will grow more and more in the future -> big profits for investors.

If Bluechip or Largecap businesses experience big fluctuations in their brand names, also known as (corporate scandals), leading to a sharp drop in their stocks, the stock will easily stabilize in the future and return to the stock market because The company's capital is quite strong as well as the liquidity of Bluechip shares is very high, so it is difficult to "collapse".

Should I invest in Penny, Midcap or Bluechip stocks?
What is Penny and Midcap stocks – Bluechip? What type of investment should be?

Conclude:

"What are Penny and Midcap stocks?? What are Penny and Midcap stocks? Which stocks should be invested with effective and low risk? This paragraph, Vninvestment has brought you full information about 3 types of stocks Smallcap, Midcap and Largecap. Hope the article will give you useful knowledge to help you make the most effective investment decision!

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Diệp Quân
Nguyen Manh Cuong is the author and founder of the vmwareplayerfree blog. With over 14 years of experience in Online Marketing, he now runs a number of successful websites, and occasionally shares his experience & knowledge on this blog.
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