On Topic Are We at the Beginning of a New Small-Cap Era? Let us know your thoughts at magazine_editor@morningstar.com No. Fewer small companies will have access to capital than after past recessions, so the asset class as a whole will not outperform in the early phase of recovery. Beth Corrigan Alexandria, VA There will be significant opportunities for small-cap companies going forward, once the economy turns the corner. In the “new” economy—in the post-conspicuousconsumption/spend, spend, spend era—smaller companies, able to move quickly and pinpoint profit opportunities more deftly than larger companies, will be at an advantage. Michael Hirsch Advest New York, NY “This particular recovery will be led by higher-quality large-cap stocks that are self-sufficient from a cash-flow perspective. The tightening that we have seen in the credit markets will make it more difficult for small caps to have a sustainable lead position in this recovery.” Ali Farhoumand One Resource Financial Consultants Fort Wayne, IN 12 Morningstar Advisor August /September 2009