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Small-Caps Still a Good Long-Term BuyBy MEG RICHARDS NEW YORK (AP) -- The nation's tiniest and most troubled companies led last year's rally with spectacular gains, and now many market players are betting that bigger, more stable concerns will preside over the next stage of the recovery. But that doesn't mean you should sell off your small-cap mutual funds. If anything, financial experts say, the astonishing pace of 2003's advance is the best case yet for giving small-caps a permanent place in your portfolio. And even if you missed out on last year's gains, there's still plenty of reason to put money in this asset class. The smaller firms that survived the downturn have emerged leaner than before, and in some cases with stronger management, benefiting from an influx of senior staff laid off by larger organizations. Now, with a robust economy predicted for this year and many smaller companies consistently reporting earnings above expectations, small-caps are poised for continued success, said Mary Lisanti, president of New York-based investment adviser AH Lisanti Capital Growth. "A lot of intellectual property resides with small companies," Lisanti said. "There's usually some theme that gives them a nice wind at their back. You add that to an economic expansion and it becomes a nice, stiff breeze." Any number of factors can help a small company rise above larger competitors or give an upstart firm an edge. Some small companies are focused on the nation's swelling Asian and Hispanic populations. Others are targeting fashion to women over the age of 35. Still others are peddling new computer technologies, alternative sources of fuel or potentially lifesaving medical devices. Back to Original Article: News You Can Use
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