What percent of your portfolio is in Mid-cap, and small-cap?

Question

What percent of your portfolio is in Mid-cap, and small-cap?

Answer 1

Depends on risk tolerance.  Small caps offer the best growth opportunity but they are also more volatile.  Think about it, giants like Microsoft, Apple, and Google all started as small cap stocks.  As a company matures, it's growth slows and while it is profitable it doesn't bring in large year over year returns.  Walmart and McDonalds are good examples of large slow growth companies.

Midcaps are just that, in between small and large cap.  They offer potential growth but with less volatility than small caps.

Also since the inception of the NYSE, small cap value stocks have delivered the best return by a significant margin.

So I weight my portfolio towards small cap.  To be safe, pick about 60% large cap for stability.  Divide the rest between small and midcap based on your risk level.  High risk = balance in small cap.  Mod. Risk = 25% Midcap 15% Small. Low Risk 35% Midcap and 5% Small cap.

Answer 2

Don't know, Don't care.  Advisors justify their fee by doing such meaningless allocations.  Find great companies at reasonable valuations.  Make sure they are not all behemoths that tend to grow slower and slower.  Other than that don't get hung up on allocations.  If choosing mutual funds, choose flexible or all-cap, giving the manager plenty of opportunity to find good stocks at good prices.  Do make sure you have international and emerging market exposure also.

Answer 3

I have lately pulled most of my portfolio out of stocks and into Government Debt (Bonds, T-Bills).  The way the market is just so crazy lately because EVERYTHING boils down to oil (including the plastic used in my keys and all the petroleum products in the rest of the computer), I am staying out of small and mids.  I have some money still in Large Cap stocks (GE, Abbott) and a few of the Vanguard funds.  Prior to that I am in it for the long haul, I only had 10% or less in small and the same for mid's.  Good luck my friend.