After the Fed
Time to jump into small-caps?
By Craig Tolliver, CBS MarketWatch
Last Update: 4:51 PM ET Oct 16, 1998Mutual Fund Center
The latest Fed rate cut could give investors the guts to get back to small-stock funds. John Rekenthaler, Morningstar's director of research, told The Wall Street Journal it's as an "excellent time to be buying small-cap funds." Small stocks are cheaper than large stock equivalents, and investor psychology should turn bullish on small stocks, he figures. Rekenthaler does caution, however, that should the Fed's rate cut fail to prevent a recession, small stocks could get even cheaper. On Friday, small-cap stocks got off to a good start, with the Russell 2000 Index ($RUT) of small-company shares outpacing many broad-market averages. Rekenthaler, no-load fund analyst Susan Beldon, Tim Medley of Jackson, Miss.-based Medley & Co. and Lou Stanasolovich of Legend Financial Advisors offered these small-stock fund suggestions to the paper:
Happy investing!
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