Fund Manager: Large Caps Still A Good Buy

This could get confusing. We just heard from someone who likes small caps for 2007 but what's the view on large caps? Will they still hold investor interest this year or will small caps rule? George Foley is First Vice President, Portfolio Manager at Glenmede Large Cap Value Fund . He appeared on "Squawk on the Street" to give his forecast.

Foley admitted that it wasn't until late in 2006 that large caps were finding a lot of enthusiasm among investors-but he believes that large caps are a good buy. His reasons? He says that the up side for small caps is just about over--as Foley says we are at the end of a traditional 7-8 year cycle of small caps vs. large caps. He also says that large caps have a lower PE ratio right now and heading into 2007 and he says large caps are a "defensive" buy right now because they provide good dividends and have good balance sheets.

Foley says he likes stocks like Pfizer , IBM and Cisco (Cisco doesn't pay dividends but has a good balance sheet.) Foley's fund owns shares in all three companies. His favorite sectors include tech and health care.