The Middle Child

Bill Parrott |

Being the middle child is tough; ask Jan Brady, Lisa from the Simpsons, or Malcolm in the Middle. Most of the attention falls on the firstborn child or the family's baby. Mid-cap stocks suffer the same fate because investors want to own large-cap or small-cap stocks. 

Since 1980, mid-cap stocks have outperformed the S&P 500, generating an average annual return of 12.72%. The returns have been higher than large caps, but the downside has been similar. From July 1982 to June 1983, the mid-cap index soared 82%, whereas the S&P 500 rose 61%. During the Great Recession, both fell by 43%.[1]

Mid-cap stocks make an excellent portfolio choice because they survived the startup and small-cap phase, but they still have room to grow. Some popular mid-cap companies include Kroger's, Dollar Tree, RH, Dick's Sporting Goods, and Skechers.

The Dow Jones US Mid Cap Index has been up 215% over the past ten years, producing an average annual gain of 12.14%, similar to its 40-year average annual return.

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Consider mid-cap stocks if you want to give your portfolio a boost.

April 20, 2022

Note: past performance is not a guarantee of future performance.


[1] Dimensional Funds Returns Web – January 1, 1980 to March 31, 2022