Year-end portfolio moves to make even with this week’s market rout

Morgan Stanley’s target for the S&P 500 next year is 2,750, which is right around where the index is now.

That means flat or low single-digit returns are to be expected, Shalett said.

Investors would be wise to steer away from vulnerable areas including technology, consumer discretionary and communication services, according to Shalett.

Areas of the market with more promise include energy, consumer staples, health care and REITs, she said.

Now is a great time to take a look at your portfolio and rebalance, said financial advisor Paul Pagnato, CEO of PagnatoKarp.

Take a look at all of your holdings across asset classes – stocks, bonds, cash and others – and assess whether you need to adjust your allocations, Pagnato said.

When it comes to rebalancing, be sure you don’t do it too much or too little. Consider adjusting your investments anywhere from once a quarter to once a year, depending on your investment profile and what is going on in the markets, according to Pagnato.

“The maximum I would do it would be once a quarter,” Pagnato said. “If you start doing it more than every quarter, it can start to become tax inefficient.”

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