Should you buy large companies because it 90 percents owned by banks, insurance and large mutual funds? Should you buy small companies because you feel that it has a lot of room to grow? Should you buy Mid-Cap because you think it provide you safety plus room to grow? No matter what the options may be people will always have different opinions. You have a lot of options to make money whether from large companies, mid-cap or small-cap.

How Much Risk Should I Take?
If you plan to buy a house within a few years then it probably not wise to invest in the stock market. Something like the housing bubble would decrease the value of your stocks. If you have no debts and set aside about 7 months to a year of saving and you are only 26, then by all mean take some risk. If you are a widow and you have 5 kids to look after, then investing might not be a good choice. Having money in CD probably would be a better choice. The risk you should take depends on your goal and your financial conditions you are in. Risk also depends on how much effort you willing to put toward researching a stocks to buy and maintaining it to see if it still a quality company.

Setting Enough Emergency Saving.
The reason that you want to set up Emergency Fund, is that you don’t have to be force selling your stocks just to pay some credit card bills. You should set up between 7 months to a year of saving before investing in stocks.

If you’re having credit cards trouble then I suggest you avoid gambling in the stock market. I will not tell you to buy only small companies because it has room to grow. I will not tell you to buy only large companies because it is safe. I will tell you that no matter if it small-cap, mid-cap or large cap all three are risky. Bear Stearns is a large investment company and you witness it being bought out only $10 a share.

Final Thought.
Risk to this Author is how much effort you put into researching a stock, and the goal and financial conditions I am in. If you think because you buy large companies and you are safe, then you are probably wrong. It doesn’t matter if you buy small cap, mid-cap or large-cap the risk are just the same. What stock to buy depends on the business model you find it sound and promising?