Investing in US large-cap stocks can be quite rewarding and provide several benefits for investors. US large-cap stocks are shares of companies that are firmly established, financially stable, generate consistent cash flows, and have a proven track record of success, which can make them a less risky investment option. Additionally, US large-cap stocks tend to be more liquid, which means they can be easily bought and sold on the stock market. This offers you greater flexibility and the ability to react quickly to changing market conditions.
Companies are categorized as large-cap (or big-cap), mid-cap, and small-cap based on their market capitalization (m-cap), which refers to the total value of a company's outstanding shares of stock. In India, companies qualify to be large-cap if their market capitalization exceeds ₹20,000 Cr. What are large cap stocks in the US, you ask? US large-cap stocks have market capitalizations above USD 10 Bn. It is easy to see the massive scale and m-cap of US large-cap stocks which feature companies that are pioneers in technology, innovation, and services. Furthermore, these stocks are associated with low volatility and higher consistency in performance. No wonder, there is so much potential for stable long-term gains. Let us take a look at 3 of the popular and high-performing US large stocks that you can consider owning.
The market price at the close of business on 10th Mar 2023 – USD 248.60
Stock exchange listed on – NASDAQ
Who hasn’t used Windows OS? Microsoft is one of the largest companies in the world with a market capitalization of over USD 2 Tn. It is also a highly diversified company with stakes in computer hardware (Surface PCs) and software (Windows, etc.), video games (Xbox), cloud computing (Bing), and lots more. With a proven track record and global domination in several domains, Microsoft stock can be a good proposition for building long-term wealth.
The market price at the close of business on 10th Mar 2023 – USD 148.50
Stock exchange listed on – NASDAQ
Another brand that needs no introduction, is Apple. In 2022, it had become the company with the highest m-cap in the world above USD 2.5 Tn. With the consistently high demand for its products like MacBook, iPhone, iPad, etc. Apple has shown itself to be a reliable brand and has given handsome earnings to its investors over the years.
The market price at the close of business on 10th Mar 2023 – USD 90.73
Stock exchange listed on – NASDAQ
Part of the Big Five American information technology companies, Amazon has come a long way since being an online bookstore. With the continually growing boom in the eCommerce segment and Amazon becoming a leading brand in large economies like India through its online store and products such as Alexa and Fire TV, many believe that Amazon is a stock worth buying and holding for the long haul.
US large-cap value stocks are more predictable. While they may not offer very high returns, they are known to generate wealth with a longer horizon in mind. Many of them pay dividends as well, which can act as a passive source of income. While you can consider these or the several other large-cap stocks available (like Meta, Pfizer, IBM, Tesla, Citigroup, etc.), always carry out your research first.
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Yes, US large-cap stocks can be a good investment, especially for long-term wealth generation. These companies are well-established, financially stable, consistent in their performance, come with lower risk than volatility than other companies, and offer a diverse exposure to investors. Many of them pay periodic dividends as well.
There’s no fixed count for the number of US large-cap stocks. This is because the qualification criteria are USD 10 Bn, and whenever a company’s value drops below it, it (technically) becomes a mid-cap company. So, there are always new entrants and leavers from this list based on market conditions and stock performance. The S&P 500 is an index that focuses on the top 500 US large-cap stocks and is widely considered the benchmark for this segment.
