| Mid-size companies between $1 billion and $10 billion
market capitalization (number of outstanding shares times price)
offer investors rapid earnings growth and potential price appreciation.
The number of mid-cap stocks varies from month to month as valuations
change, but there are usually around 1,000 mid caps from which to
choose. Well known mid caps include Toll Brothers (TOL),
Dollar Tree Stores (DLTR)
and Reliant Energy (RRI).
Since 2003 mid-cap stocks have outperformed large-cap stocks included
in the Dow Jones industrial average (^DJI)
and the S&P 500 (^GSPC).
For example, the MidCap SPDR (MDY),
an exchange-traded fund (ETF) that tracks the Standard & Poor's
MidCap 400 Index has moved from 68.03 on March 12, 2003 to 152.5
on March 20, 2007, a 124.17 percent increase. For the same period
the DJIA was up 62.71 percent and the S&P 500 increased 75.45
percent.
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