A recent surge in small cap stocks - companies with a market capitalization of under $1 billion - means individual investors should be placing at least a few of their chips in the small-cap arena.
In fact, the rally has pushed the Russell 2000
, an index of 2,000 small cap stocks, to within shouting distance of record highs.
benchmark has climbed a whopping 34% since its lows in early October and is within 5.8% of its closing high of 865.29 set back in April.
By comparison, the Dow Jones Industrial Average
, which earlier this month hit 13,000 for the first time since 2008, is still 7.9% from its record high in October 2007.
Yet many investors haven't been around to enjoy the ride.
Since the end of April 2011, small-cap mutual funds have seen $15.9 billion in outflows, and small-cap exchange-traded funds (ETFs) have seen $4.4 billion withdrawn.
That's probably because large-cap stocks outperformed their smaller brethren posting an 8.5% premium over them from April through September.
According to CBS News,
investors have been voting with their feet, yanking money out of small-cap mutual funds in 37 of the 40 weeks since May.
But so far in 2012, that trend has begun to change.
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