Market capitalization is the total value of the company's shares in the marketplace and is defined as current price per share times number of shares outstanding. Stocks are usually classified as large, mid, small or micro cap. Large cap stocks are generally stable, mature companies. They tend not to be as volatile as their small cap counterparts. Small cap companies tend to fluctuate more in price but have historically offered higher returns.
Many investors choose to diversify by investing a portion of their portfolio in foreign stocks.
Foreign stocks may offer investors higher potential for price appreciation than domestic stocks. Companies in developing countries have the advantage of higher population growth, as well as expanding markets and industries. The recent Asian crisis is just one example of how volatile foreign stocks can be. In addition to increased volatility, investors have to worry about fluctuations in currencies. If a country's currency is devalued, US investors can lose money whether or not the stock price drops.