How should one approach the mid and smallcap holdings now? Deven Choksey answers

economictimes.indiatimes.com:

Deven Choksey, MD, DRChoksey FinServ Pvt. Ltd, says: “To a greater extent, the midcap and smallcap companies’ rally is driven largely because of the higher amount of money getting into these stocks on a comparatively smaller base of equity, that is the first point. Also, a group of people systematically would probably participate into this activity, as a result of which the rally becomes more prolonged and that why we are seeing a relatively higher valuation and a disproportionate rally in stock prices.”

After that bit of an aberration on Tuesday, it seems pretty great going for the market. We are above the 20,200 mark and not a bout of profit-taking besides Tuesday even within the broader end of the market. The largecaps may have led the rally this week but we are not seeing any serious damage within the broader end of the market. How should one approach the mid and smallcap holdings in one's portfolio now?
On one side, we have the compelling reasons for some of the largecap companies to buy into the portfolio because of the languishing valuations that they are putting currently and the kind of opportunity that they are providing at this point of time. They are probably becoming a better choice than some of the mid and the smallcaps. So, preference is definitely going towards largecaps.

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Even though they generate a relatively smaller percentage of return, they still remain better off largely because of the margin of safety that they provide at the current levels. On the