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[0:17] ..." few months. I spoke with portfolio manager less Apple -- at Cabot money management in Salem. What is your voice for prudent investors may be investors who were looking toward retirement or trying to build a"...
[2:50] ..." institutions in general. While they do. They do formed some of their operating expenses with their portfolios they also on the other hand have a much longer time horizon. And many individual investors. And well we're"...
[4:11] ..." banks. On the investment bank loans actually dead and buried in the United States but you're left with large commercial banks. And you could see a number of them. Either fail or at the very least the this values the publicly trade equities stock prices. Of those commercial banks' fault too. Virtually worthless levels and remain there for ten years."...
[0:00]" This is every sold in the double ABC newsroom there seems to be an agreement on the government's largest financial bailout in history. As negotiators present the outline of the 700 billion dollar plan. Investors -- horse saving for college in new whole retirement have seen their assets dwindle over the past few months. I spoke with portfolio manager less Apple -- at Cabot money management in Salem. What is your voice for prudent investors may be investors who were looking toward retirement or trying to build a college fund."
[0:31]" In our plans right now is it is don't be -- On this is that it's -- it's environment now that calls for more focused on capital. Preservation. And capital appreciation it's it's extremely fluid. Financial environment. And you are could fight it is to. Not weighed into the battle but. But be cautious and if you do you make changes your portfolio if he can make change mister -- and politician do it. Slowly and give it incrementally. Rather then. Jumping into the market are jumping out of the market with two seat. And this is not a time to be making large bets in any direction. It's time to be very cautious."
[1:17]" Less short of flow -- mattress or a bank CDs. What are some of the more safe investments that one --"
[1:26]" Well of course treasuries. Are still considered relatively -- so far come however they don't provide you with any yields right now. But I think in general and the corporate. Bond market is now the short term. In the short term credit instruments. The FDIC insured of course deposits or or money market there are essentially government -- For at least a temporary period of time that are going to be -- and -- Interpret the vast majority of investors."
[1:57]" Have you heard from a some investors who have. Need to very rapid. Decisions to move money around in this. Very volatile market."
[2:08]" You know I I think we're seeing some indications that that the retail investor. Has finally. Begun this the last phase. Typically the bear market which is capitulation net means taking there parents and then and liquidating. All their non cash securities moving -- cash. Historically speaking that's that's typically been but could sign ever closer to the bottom."
[2:34]" Now what what about your your other investors maybe your institutional investors or cities and towns. Who will obviously. Depend on the on the lot of these investments to. To underwrite major projects."
[2:48]" Yeah that's a good question and institutions in general. While they do. They do formed some of their operating expenses with their portfolios they also on the other hand have a much longer time horizon. And many individual investors. And well we're not recommending anybody meet. -- radical change to strategic asset allocation -- long term allocation. At the same time we do you think that the current environment Warren anymore defense of tactical allocation. Regardless. But -- an institution or individuals so for our institutions you know we're we're also falling into line with our defensive posture. Written a little bit more cash and staying much more cautious about. Deploying that cash back into the markets particularly equity markets."
[3:37]" them and ask you to come up with a scenario that is if indeed. The government did not act and there was no real plan. What could be the worst case scenario that we could --"
[3:52]" Well hope. Confirm. -- can get pretty wild. The worst case scenario right -- realistically worst case scenario there's no pillow whatsoever would be the failure of and number of our largest financial institutions to clear commercial banks. On the investment bank loans actually dead and buried in the United States but you're left with large commercial banks. And you could see a number of them. Either fail or at the very least the this values the publicly trade equities stock prices. Of those commercial banks' fault too. Virtually worthless levels and remain there for ten years."
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