Money Managers See Value in Large-Caps

Resendes also uses large-cap ETFs in his mutual fund. According to Morningstar, the SPDR S&P 500 ETF(SPDR Quote) and the Financial Select Sector SPDR Fund(XLF Quote) were among Resendes' top holdings as of Oct. 31.

He says there is a great deal of opportunity in large-caps for those who have the courage to invest in what has been a tough market. "There is an emotional cost and a financial cost to buying stocks," Resendes said. "Emotionally, it's a difficult time to buy stocks right now. Financially, it's a wonderful time to buy stocks at these valuations."

Resendes thinks it will not take much for many stocks to bounce back, with the bar already set so low. "You can buy stocks at levels that have very low expectations right now," he said. "Doing so will stack the odds in your favor."

For investors who are looking for only one or two large-cap stocks to round out their portfolio, Resendes believes Google(GOOG Quote) and Coach(COH Quote) are worthy of consideration. "When Google was trading above $700 a share, we thought expectations were too high," he said. "At $300 a share, you are paying for it to only grow at an annual rate of around 5% to justify its current price."

In October, Coach reaffirmed its fiscal 2009 EPS guidance that calls for 10% growth. Resendes is optimistic toward the company's plans to continue to grow its brand. "Coach has about 300 retail stores in North America," he said. "They believe that the market can support 500."