Mid-cap stocks offer growth potential, but they also come with several disadvantages that investors should consider. One major drawback is higher volatility compared to large-cap stocks. Mid-cap companies are still expanding and may not have the financial stability or diversified revenue streams of well-established corporations. As a result, their stock prices can fluctuate significantly during market uncertainty.

Another disadvantage is limited access to capital. Mid-cap firms may find it harder to secure financing during economic downturns, which can slow expansion plans or affect profitability. They are also more vulnerable to competition from larger, more resourceful companies that can dominate market share.

Liquidity can be another concern. Mid-cap stocks typically trade in lower volumes than large-cap stocks, which may result in wider bid-ask spreads and difficulty entering or exiting positions at desired prices.

Information availability is sometimes limited as well. Mid-cap companies may receive less analyst coverage and media attention, making it harder for investors to access detailed research and insights.

Additionally, mid-cap stocks carry business execution risk. Since many are in a growth phase, poor management decisions or failed expansion strategies can significantly impact performance.

Overall, while mid-cap stocks can provide balanced growth opportunities, investors must carefully assess the associated risks before including them in their portfolios.