Yes, size does matter. In each broad category, you have the choice to buy mutual funds that invest in small companies. They may have a higher potential return, but also may have more risk. Medium-sized companies may reduce the risk over time since they are not so small, are better established than small companies, and may have the ability to generate profit growth over time. Large-company stock funds may have fewer risks, as these very established companies have proven track records, dividends, and earnings growth, and are thought to be less risky than small company funds.