Mid-Cap Stocks Are the Market's Sweet Spot

Here are my four favorite funds that focus on medium-size companies.

Want to beat the stock market? Consider stocks of midsize companies, which are all too often neglected by both professional and individual investors.

The numbers are striking. From December 31, 1979, through August 31 of this year, the Russell Midcap index returned an annualized 12.8%. That beat Standard & Poor’s 500-stock index, which tracks large-capitalization stocks, by an average of 1.3 percentage points per year. And it bested the Russell 2000 index, which tracks small-company stocks, by an average of 2.1 percentage points per year.

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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.