Lewis J. Altfest, the principal of Altfest Personal Wealth Management in New York, with $600 million under management, cut his firm's small-cap allocations to 6% of clients' portfolios some time ago. "We think there are better opportunities in larger company growth funds at a reasonable price," he says.

Right now, momentum seems to favor small-cap stocks over their large-cap counterparts. Will the pendulum swing back to large caps soon?

"Small caps do seem to have more momentum," says Lipper's Tjornehoj. "I don't expect large-caps to take over soon. There will come a day, but that seems far off to me."

Bruce W. Fraser, a veteran financial writer based in New York, specializes in writing about wealth management, financial planning, investments, small companies, and green environment issues. He is a frequent contributor to Financial Advisor magazine. He may be reached at [email protected]. Visit him at www.bwfraser.com/home.

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