What do these terms mean?

[Skooby]

Large-cap Growth
Large-cap Value
Mid-cap Equity
Small-cap Equity
International Equity
Emerging Markets Equity

I see these terms all the time in stock articles and such. What's the difference between Growth, Value and Equity when it comes to stocks?

[jIM_Ohio]

large cap- a company whose market cap (total stock value) is greater than $6 billion.

mid cap- a company whose market cap (total stock value) is between $2 and $6 billion.

small cap- a company whose market cap is between $500 million and $2 billion.

growth- company will have a high PE ratio
value- company will have a low PE ratio

PE ratio is Price to earnings. Value vs growth is very subjective (there might even be value-blend-growth categories.

equity means stocks. Opposite of equity would be bonds (probably).

[sweeps]

Growth means the company's earnings are growing faster than the average stock, and the fund manager expects that to continue. Stock price is not a big determining factor.

Value is somewhat the opposite. The company may not be growing as fast as the average, and often the stock price has been "beat down". The fund manager will buy the stock because he thinks either the price has gone too low and/or because he thinks the company will turn around soon.

Note that "growth" and "value" are general terms. One person's growth stock could be someone else's value stock depending on what their definition for growth and value are.

Equity just means stocks -- the fund manager could be holding both growth and value stocks.

Large-, mid- and small-caps refer to the total value of all outstanding shares of that stock. (> $5 billion, between $1 billion and $5 billion, and < $1 billion, respectively).

Of course international is stocks of countries outside the U.S. Emerging markets is a subset of that -- from countries that are from an emerging economy, typically 3rd world countries that are migrating from, say, agriculture to technology.

[cicy33]

large cap- a company whose market cap (total stock value) is greater than $6 billion.

mid cap- a company whose market cap (total stock value) is between $2 and $6 billion.

small cap- a company whose market cap is between $500 million and $2 billion.

growth- company will have a PE ratio
value- company will have a low PE ratio

PE ratio is Price to earnings. Value vs growth is very subjective (there might even be value-blend-growth categories.

equity means stocks. Opposite of equity would be bonds (probably).

That is a great answer! I really mean that. it is so simple to understand.

[Skooby]

Growth means the company's earnings are growing faster than the average stock, and the fund manager expects that to continue. Stock price is not a big determining factor.

Value is somewhat the opposite. The company may not be growing as fast as the average, and often the stock price has been "beat down". The fund manager will buy the stock because he thinks either the price has gone too low and/or because he thinks the company will turn around soon.

Note that "growth" and "value" are general terms. One person's growth stock could be someone else's value stock depending on what their definition for growth and value are.

Equity just means stocks -- the fund manager could be holding both growth and value stocks.

Large-, mid- and small-caps refer to the total value of all outstanding shares of that stock. (> $5 billion, between $1 billion and $5 billion, and < $1 billion, respectively).

Of course international is stocks of countries outside the U.S. Emerging markets is a subset of that -- from countries that are from an emerging economy, typically 3rd world countries that are migrating from, say, agriculture to technology.

large cap- a company whose market cap (total stock value) is greater than $6 billion.

mid cap- a company whose market cap (total stock value) is between $2 and $6 billion.

small cap- a company whose market cap is between $500 million and $2 billion.

growth- company will have a high PE ratio
value- company will have a low PE ratio

PE ratio is Price to earnings. Value vs growth is very subjective (there might even be value-blend-growth categories.

equity means stocks. Opposite of equity would be bonds (probably).

Thank you both...I get it now.

Seems like it can get to be a guessing game at times...lots of research to do...I think it's fun though.

I went to an asset allocation website and it gave me this for an aggressive portfolio:


Large-cap Growth - 25%

Large-cap Value - 20%

Mid-cap Equity - 10%

Small-cap Equity - 15%

International Equity - 25%

Emerging Markets Equity - 5%

Here is the website I went to: https://www.oppenheimerfunds.com/com...GQ2BLARENV4K5Q

[kv968]

It's great that you're willing to the research before you begin investing. One thing you want to look at while investing with mutual funds is their expense ratio (ER). If you look at the Oppenheimer funds that you posted, they're quite high as compared to similar funds of other companies. My rule of thumb is if a fund offers classes of shares (ie. "A", "B", "C") they usually have a higher ER than others or have a load fee associated with them which you should try to avoid.