Taking Stock

Smid-cap stocks: the Goldilocks asset class

Investors may at times empathize with Goldilocks and her dilemma of extremes. Some stock investments are too risky. Others produce returns that are too flat or volatile. Some companies go bankrupt. Others grow rapidly. So what is the "just right" investment, à la Goldilocks?

We think the answer is a smid-cap portfolio, which blends the stocks of small- and mid-cap companies to ideally capitalize on the high growth rate of small firms and the above-average but more stable growth rate of mid-sized enterprises. We think a smid-cap portfolio may offer benefits that an investment with a smaller or larger capitalization may not and can be an integral part of a diversified portfolio of assets.

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