 Money Guide > Stocks > Different kinds of Stocks
There are so many stocks to choose from, so investors usually like to put stocks into different categories. You can slice and dice the stock market into all sorts of different groups, but the most common ways are by size, style, and sector. BY SIZE When talking about a company's size, we're referring to its market capitalization, the current share price times the total number of shares outstanding. It's how much investors think the whole company is worth. Large-cap companies tend to be established and stable, but because of their size, they have less growth potential than small caps. As a result, over the long run, small-cap stocks have tended to rise at a faster pace. But there's a trade-off: With less developed management structures, small caps are more likely to run into troubles as they grow -- expanding into new areas and beefing up staff are examples of potential pitfalls. BY STYLE A "growth" company is one that is expanding at an above-average rate. Catch a successful growth stock early on, and the ride can be spectacular. But again, the greater the potential, the bigger the risk. Growth stocks race higher when times are good, but as soon as growth slows, those stocks tank. The opposite of growth is "value." There is no one definition of a value stock, but in general, it trades at a lower than average earnings multiple than the overall market. Maybe the company has messed up, causing the stock to plummet -- a value investor might think the underlying business is still sound and its true worth not reflected in the depressed stock price. A "cyclical" company makes something that isn't in constant demand throughout the business cycle. Cyclical stocks bounce around a lot as investors try to guess when the next upturn and downturn will come. By sector
Generally speaking, different sectors are affected by different things. So at any given time, some are doing well while others are not. Sectors in Pakistani Stock Markets:
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