What does it mean when a stock is described as large-cap, mid-cap, or small-cap?

Cap is short for market capitalization: the company's share price multiplied by its total shares, which is what the market thinks the whole company is worth. Large-cap generally means companies worth roughly $10 billion or more, mid-cap sits in between, and small-cap means smaller companies, often under about $2 billion. Large-caps tend to be established and less volatile; small-caps can grow faster but swing harder and carry more risk. A total U.S. stock market index fund automatically holds all three in proportion to their size, so you don't have to pick. Some investors add a dedicated small-cap fund hoping to capture the historically higher long-run returns small companies have sometimes shown, but that's optional and adds volatility.