Q: Two related questions: Do you now favor large-, mid-, or small-cap stocks? What's the outlook for small-caps? Will they stay up?
A: Within the past six weeks, we've moved away from small-cap stocks and have allocated two-thirds of our equity position to large and the rest to mid. We did this on the basis that small-caps have outperformed for the last five years running -- we felt that they've been getting extended relative to fair valuations, so we sold those stocks and moved into large- and mid-caps. The prospect for small-cap stocks is now more company-specific than it is group-specific. You've got to pick your stocks very carefully, since the bull market has raised all boats there.