A Superb Small-Cap Fund

Small caps are overpriced after a huge run, but you shouldn't abandon them entirely. Perritt Emerging Opportunities is one of the best no-load funds that specializes in these stocks and is open to new investors.

Stocks of smaller companies have gotten pricey since the small-cap boom began in 1999. The best place to find bargains today is in stocks of large companies, particularly fast-growing companies. The worst place to look is among small caps.

So why bother with a small-cap fund? Because short-term market swings are unpredictable. I'm willing to wager that large-cap stocks will beat small-cap stocks handily over the next five years, but it makes no sense to put all your money into any one type of stock fund.

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Steven Goldberg
Contributing Columnist, Kiplinger.com
Steve has been writing for Kiplinger's for more than 25 years. As an associate editor and then senior associate editor, he covered mutual funds for Kiplinger's Personal Finance magazine from 1994-2006. He also authored a book, But Which Mutual Funds? In 2006 he joined with Jerry Tweddell, one of his best sources on investing, to form Tweddell Goldberg Investment Management to manage money for individual investors. Steve continues to write a regular column for Kiplinger.com and enjoys hearing investing questions from readers. You can contact Steve at 301.650.6567 or sgoldberg@kiplinger.com.