"You've got to fish when the fish are running" so I won't sell just because this market is long in the tooth or because, sooner or later, there will be a correction. But you can bet our clients and I have trailing stops on most of the big positions we hold! That way, we let the market tell us when it's time to lighten up.

Until then, I think our nation can expect a serious overhaul of our individual and business tax system, grounds for rejoicing no matter what the market does. I think we can expect the rollback of over-reaching regulations that have stifled consumers, entrepreneurs and businesses, grounds for rejoicing no matter what the market does. And I think we will see the standard of living rise for many Americans whose jobs were destroyed in the pursuit of some greater Stalinist-type 5-Year Plan for some perceived social good, grounds for rejoicing no matter what the market does.

But Is There Anything Left to Buy?

The answer to that question, as always, rests with each individual investor's time frame and temperament. For me, I believe there is. I am buying US-based small and mid-cap firms via active managers.

Why small and mid-caps? The reason is simple. These are the firms that have not yet grown to the point where a Facebook (Nasdaq:FB) must cozy up to Chinese dictators in a secret agreement to censor material that might upset the dictatorship, or where Apple (Nasdaq:AAPL) and Google (Nasdaq:GOOG) must spend countless man-hours trying to satisfy a bunch of petty bureaucrats in Brussels. Large-cap firms, by and large, have far-flung interests and revenue sources well beyond US borders. Companies with market caps below $10 billion tend to be far more focused on domestic markets.

I think an intelligent mix of small-cap companies (those typically with a market capitalization of less than $2 billion) and mid-cap firms ($2 billion to $10 billion) are in the sweet spot of what I believe will be a rejuvenation of the markets.

We can buy individual firms, ETFs or actively-managed mutual funds, closed-end and open-end, as our way to invest in these companies. I will take actively-managed companies or mutual funds over ETFs at this point in market history.

"Passive investing" via ETFs is all the rage these days. I think this is an accident waiting to happen. Right now, you can buy any of scores of ETFs from dozens of providers in any particular market. But just change the word "passive" for the word "unthinking" and you'll see why I feel strongly about this. If you buy a small-cap or mid-cap ETF today, you are buying a portfolio that is fixed. If the price of the securities the ETF represents is high, as it is now, congratulations! You may be buying a fixed portfolio at the top.

It may continue to advance or it may decline. Even if it advances, some of its component companies will do well, others will not be worth owning. It doesn't matter. The ETF, by its charter, will keep owning the losers as well as the winners. They'll hold them even if they go to $0 or until they are delisted, which usually comes at a price of $1.

Actively-managed funds, however, allow - demand - that the portfolio managers assess each company within their portfolios to determine if a company's shares represent enough value to continue holding or should be added to or sold. Those who disparage active management cite the fact that the "average" actively managed fund often under-performs a passive ETF. Well, here's a thought: don't invest with average managers! The track records of all fund managers, or in the case of individual companies, company management, are well documented, right out there for all to see. There's a reason why you don't see ETFs in Warren Buffett's portfolio.

Among my favorite actively-managed funds in these areas are Akre Focus Retail (MUTF:AKREX), Parnassus Mid-Cap (MUTF:PARMX), First Trust/Confluence Small Cap Value (MUTF:FOVAX), Victory Sycamore Established Value (MUTF:VETAX), JPMorgan Small Cap Equity (MUTF:VSEAX), Boston Trust Mid-Cap (MUTF:BTMFX), and a play on a rebound in natural resources and commodities, LoCorr Long/Short Commodities Strategy (MUTF:LCSAX). You'll note that many of these are load funds. That's because at 2 of my 3 custodian brokers, as an RIA (Registered Investment Advisor), I can buy these without load for my clients, and I can get out anytime with just a $49 fee - completely waived if we happen to hold for a minimum holding period of x days.

You can find other classes on most of these, however, without load. I have a personal 20-year history with VETAX and VSEAX and 5-10 years or more with all the others except LCSAX, which is less than 5 years old. I'm very comfortable with them. So rather than explain why I've winnowed the universe of hundreds of actively-managed funds to just these few, instead I invite you to review them and do your own due diligence. It took me a long time to decide upon these few; you can now take a much shorter time and see if you agree.

You can easily review the top 25 holdings of each of these fine mutual funds on a site like Morningstar or see all their holdings by visiting each fund's website. You won't see any FANGs here or any Nifty Fifty, either. But you might be surprised at how many firms you do recognize. There are a lot of brilliant companies in this country with a market capitalization of less than $10 billion.

Some examples, all held by one or more of my favorite funds: DENTSPLY (Nasdaq:XRAY), National Oilwell Varco (NYSE:NOV), Hanesbrands (NYSE:HBI), Whole Foods Market (NASDAQ:WFM), Cardinal Health (NYSE:CAH), Charles Schwab (NYSE:SCHW), Micron Technology (Nasdaq:MU), Archer Daniels Midland (NYSE:ADM), SunTrust Bank (NYSE:STI), Ingersoll-Rand (NYSE:IR), Aflac (NYSE:AFL), Old Dominion Freight Line (Nasdaq:ODFL), Devon Energy (NYSE:DVN), Jacobs Engineering (NYSE:JEC), Toro Co. (NYSE:TTC), and Papa Johns (Nasdaq:PZZA). These are the kinds of firms I see as sitting in the sweet spot going forward!

We own or will be buying each of these: AKREX, PARMX, FOVAX, VETAX, VSEAX, BTMFX and LCSAX.