I have been enjoying the strength displayed by the mid caps recently. Like any retail investor, I too have my portfolio biased towards mid caps. I had read in a website www.damodaran.com about the general performance of mid caps in any market. The annualised returns are higher than that of large caps when tabulated for over 7 to 8 year periods. Also the rally in mid caps usually gathers steam between longer time intervals. This means that if one aims to get better returns as compared to the large caps, then one has to hold on to mid caps for a longer period of time. The risk associated with such a strategy is that every now and then, some of these mid caps throw some negative surprises, which the markets swiftly discount and tear them apart. A good example would be Subex Azure. Once regarded as a quality mid cap stock in the IT space, today two thirds of the company is owned by creditors. The quest for fast growth lead the company to one huge acquisition because of which the debt has spiralled and the shareholders have lost tremendous wealth even in bull market periods. The lesson I have learnt: "You better be very choosy when you enter a mid cap stock". But of course sometimes greed takes control and I do buy some small caps, although with sound fundamentals. I just keep adding to my conviction while my average returns are taken care of by some good large cap stocks and one or two high flying mid caps