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AAA  Jul. 25, 2013
Money in the middle
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The S&P MidCap 400 index reached an all-time high of 1,243.04 Wednesday, and is up 21 percent this year. Yet there weren't any headlines.

Mid-sized companies are often overlooked because many investors are drawn to extremes. They put money in the relative security of large well-established companies, or seek out small companies poised for tremendous growth.

But mid-cap stocks are important for diversification. They're less risky than investing in small-cap companies because they're established enough to offer some stability in various economic conditions. At the same time, mid-sized companies still have room to grow.

That middle ground is reflected by the mid-cap index outperforming the 18 percent return of the large-cap S&P 500 so far this year, and trailing the 23 percent return of the small-cap S&P 600 index.

Investors who shun stock picking should consider an option like the SPDR S&P MidCap 400 ETF (MDY). It's up 20 percent this year and has a 5-year annualized return of 9 percent.

Associated Press
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