To reach a prudent asset allocation, I need to add a small cap mutual fund to my portfolio. I'm a little concerned that I am "buying high" because all the small cap funds I'm considering (below) have had 20%+ returns in the last 1 year. I would like to "buy low, sell high" and not sure how to apply it here. I don't consider this market timing because I plan on buying and holding and prefer to buy when the fund is not inflated i.e. over-priced or over-valued by the market. Any ideas here on major indicators to measure if a fund is over-valued?
Symbol Fund Name 1 Wk 13 Wk YTD 1 Yr 3 Yr 5 Yr 10 Yr
PENNX Royce Fd:PA Mut;Inv 2.41% 13.64% 2.23% 22.86% 6.54% 4.98% 10.30%
STSCX Stratton:Small-Cap Val 2.62% 14.89% 2.64% 21.29% 4.81% 3.17% 10.12%
NAESX Vanguard Sm-Cp Idx;Inv 2.34% 14.98% 3.14% 27.15% 7.23% 5.09% 7.50%
RYLPX Royce Fd:Low-Prcd;Svc 2.67% 15.15% 1.15% 27.14% 11.02% 8.62% 11.14%