Although it was not premeditated, I find myself more heavily invested in small cap stocks that usual. I've held two stocks (TSYS-Telecommunications Systems and LPHI-Life Partners Holdings) for a while and have about 6% of my funds in each of these. I've also recently purchased HHS-Harte-Hanks (6% of funds) and HGIC-Harleysville Group (2% of funds).
Each of these individual purchases were sound and met my standard criteria. However, I'm not sure that I'm comfortable with about 20% of my funds in small cap. I've already had experience with TSYS and LPHI being underwater for long period of time.
I've always had the normal resistance to small cap stocks as they presumably have greater risk than large cap by virtue of their size. But I've discovered a more practical concern in recent years. There is simply less trading activity and it's sometimes challenging to buy/sell at your desired price due to this low volume. But even this has a positive side as there is sometimes a quick run-up during periods of high demand and low supply.
So I think it's time to be even more diligent in early profit taking should the opportunity avail itself. Also, I think I'll avoid taking the plunge into additional small caps until I liquidate some of these holdings.
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