Economists expect an improving U.S. economy in 2014. Historically, small capitalization companies outperform the broad market averages in the expansionary phase of the economic cycle, simply because they can grow their businesses faster than large companies in defensive sectors, such as utilities.
Our favorite investment in this space is the Fidelity Low-Priced Stock Fund (FLPSX). FLPSX has returned 37.10% since November 26, 2012, when FidelitySignal.com issued the buy signal.
FLPSX has a truly outstanding long-term track record since its inception in 1989 with an average annual total return of 14.55%. Not surprising that Morningstar rates it five out of five stars. FLPSX normally holds at least 80% of assets in stocks priced at or below $35 per share, which typically includes small to medium-sized companies.
Buy/sell signals for Fidelity funds are available at FidelitySignal.com