Investing in Small-Cap Stocks

"The small-cap sector is one area in which an individual investor can find an edge?where, in fact, small players have distinct advantages over large institutions. "

"You have a better chance of finding real value in small stocks than in larger ones."

"You never want to put all your eggs in one basket, whether it's one U.S. Treasury bond or a selection of Pacific Rim equities."

"Neither the growth nor the value style of stock picking is infallible, but both are capable of producing winners."

"Regionals are usually not glamorous, but they may be the friendliest for you, the small investor."

"Mutual funds represent the easiest and cheapest way to buy diversification and good asset management. That's true for most investments, and it goes double for small stocks."

"Internationalizing your portfolio will stabilize returns while adding some zest."

"Why invest for the long haul? Wouldn't you be better off jumping in and out, buying at the lows, selling off at the peaks?"

"What if you don't have the time, skill, or patience for financial analysis?"

"When you invest near home, you have access to legal inside information."

"You should decide on an overall investment philosophy?particularly, how much risk you're willing to take for the possibility of higher returns. "

"Before selling a decent stock that has given you a good run, find a replacement whose prospects are 50 percent better. That's how much extra return is needed to offset the commissions and taxes you'll have to pay on a trade."

"In investing, you want to prevent costs from cutting too deeply into your profits."

"You shouldn't ignore larger economic effects."

"A large percentage of the returns that have made the smallest stocks the best long-term performers have come in January."

"If you follow management's lead, you could be picking up a bargain."