What to do as your 401k shrinks

[0:05] ..." and if you're expecting yours. Be prepared for quite a shock the S&P 500 index. The market benchmark followed by many professional investors. Is at its lowest level now in eleven years down nearly 52%"...

[0:58] ..." down most asset classes are down so that would includes stocks. Commodities real estate housing. And that would be both domestic and global. So among that there are opportunities we think the most parents would be"...

[1:44] ..." And come out ahead by buying inexpensive assets those -- become -- Wells Fargo JPMorgan. And then also in the in the -- what we called a niche market area companies that have strong franchises. And attacked"...

[2:40] ..." ultimately you know first. So the time to every -- away from technology stocks was in 1999 or 2000 before they peaked and the time to rebalance away from the hot. Asset classes of the fun."...

[0:00]" The Santa -- in the double ABC news room courtly for a one K statements are arriving in the mail and if you're expecting yours. Be prepared for quite a shock the S&P 500 index. The market benchmark followed by many professional investors. Is at its lowest level now in eleven years down nearly 52% from a to record close in October -- year. I spoke with the chief investment officer Cambridge trust Jim Spencer he says there're still some opportunities out there."

[0:28]" Well -- the the watch words -- to look for opportunities. To make changes in your portfolio as appropriate. To reassess your goals and objectives. Make sure that your tolerance for risk is what you thought it was because we move through very volatile market. And that if it's appropriate that -- good -- to be rebalancing back towards your original objectives. And now right now there are some opportunities out there even though you look at the landscape and see a lot of wreckage. Well. Most markets -- down most asset classes are down so that would includes stocks. Commodities real estate housing. And that would be both domestic and global. So among that there are opportunities we think the most parents would be in corporate bonds high quality corporate bonds revealed -- anywhere from two to 4%. Higher than US treasuries. In -- municipal bonds which are now yielding on the gross basis more than US treasuries and out of selective basis in individual stocks. For example. Companies that have strong brands they can hold their pricing in this environment those would be consumer Staples. Also good opportunities in the financial sector where. Larger companies. He -- healthy strong larger companies are able to take advantage of this environment. And come out ahead by buying inexpensive assets those -- become -- Wells Fargo JPMorgan. And then also in the in the -- what we called a niche market area companies that have strong franchises. And attacked by competition. Those it will always do well regardless of the business climate there. And then. More selective basis across the board that would include international. You may have -- you comment you were saying that you know. The time to rebalance. It was a time when stocks are doing well and that's when people don't probably involves a lot of psychology it's very hard it's very hard to give up on something when it's doing well and when there are other people. Also attached to the same investment and do you attend -- Mutually reinforce each other's optimism about the individual investment. And that choosing when things get overvalued in this usually when you get trapped in the some kind of a bubble which will ultimately you know first. So the time to every -- away from technology stocks was in 1999 or 2000 before they peaked and the time to rebalance away from the hot. Asset classes of the fun. 2000 era -- was probably last year eighteen months ago to reduce your exposure do. Energy when the price of oil was a 145. Or and other commodities which peaked about the same time. Or maybe some of the speculative foreign markets which -- quite well during that period. But most people don't want to make that move when they see that more growth is possible though most people don't want to give up on their winners. And you have to discipline yourself to do that even though. You may sell something and want to go up another 50%. Because within two years it could be done over a 100% and we've seen that in the commodities market."