For some ideas on the subject that vary with risk tolerance,
age, etc: One or two of the free online asset allocation
tools I list at the site below will recommend a certain
percentage of mid cap funds. Others will recommend a
"mid/small" suggested allocation percentage.
http://home.earthlink.net/~elle_navorski/id4.html

"Bob" <tecolote[at]wavecable.com> wrote
- quote -

I am young and am 100% invested in stocks. I like simple measurement
tools, so the way I do this is:

whatever my weighting in large cap stocks, I must have an equal
weighting in small caps. I will hold mid caps as well, and this will
be slightly under the weighting of the large caps. I hold
international to same level as mid caps.

so 30% large cap, 30% small cap, 20% international, 20% mid cap.

in my 401k my contributions are aligned with this; I contribute 15% to
S&P 500 index fund and 15% to Windsor II. The 30% small cap is divided
into Royce Total return and Vanguard Explorer. The mid cap is in the
extend market index fund and international is Vanguards International
Value fund.

should be noted these choices are because that is what is available in
401k, I prefer to avoid index funds if better choices are available.

Some say you should only get mid or small caps in proportion to their
cap weighting... basically a wilshire 5000 index fund approach that
shrinks smaller company holdings into tiny proportion. I agree with
others who want to overweight mid and small cap so that your portfolio
responds to more than to the largest handful of megacompanies. I guess
this benefits you mostly in the recovery cycles, but look at this graph
that shows not too shabby even in a downturn:

http://finance.yahoo.com/q/bc?s=FLVC...,%5Erut,%5ENDX

Besides the indices, I include a managed fund of "sick" midcaps that
shows how super well that has worked out for 5 years. Where sp500 has
been flat and nasdaq has been negative, the midcap (and smallcap and
international EFA) average has been up 50% and that managed midcap
150%. It's different over some other periods, but yahoo scaling seems
to go wacky when I show longer periods. Funds of foreign mid/small
caps have also been spectacular for some years and maybe will thrive
even after the US midcaps start to stumble...

I rarely see much published about mid cap mutual funds (such as Vanguard mid
index fund) s and their role (if any, to what % extent) in one's portfolio.

Would like to hear some thoughts please.

thx