Who the Small-Cap Fits

Large-cap stocks make the headlines, but lately the small-caps have been making investors money.

Anyone considering how to invest for the long haul inevitably runs up against the allocation question. Advisers agree that only a well-balanced mix of asset classes -- stocks and bonds, foreign and domestic, small-cap and large-cap -- will protect your portfolio in all kinds of weather. In coming weeks, this column will examine some of these issues.

So diversification is the traditional argument in favor of small-cap stocks. But a look at the market's recent history shows there's another one: Smaller stocks have just been doing better. ...