Following the Federal Reserve's first rate cut in over four years, investors are advised to adjust their portfolios to adapt to the changing macroeconomic environment. Experts suggest focusing on small-cap companies that benefit from lower interest rates and exploring fixed income options as cash holdings may decline.
on Wednesday marked the first time in more than four years it moved to lower the benchmark interest rate. According to VanEck CEO Jan van Eck, investors should start thinking about how the changing macro environment will affect their investments in the year ahead.
"Fixed income is this area that is just seeing a tremendous amount of flows right now because of the rate environment, and that likely will continue," he said."About six and a half trillion dollars in money market funds, much of that will flow into either longer-duration fixed income, or some in other areas of equities."
With rates finally beginning to fall, van Eck points to the federal deficit as the next potential challenge for markets. He sees reason to stick with some popular portfolio hedges amid broader repositioning. "Can the government continue to stimulate the economy and spend so much more than they're taking in in tax receipts? Our answer is that's going to cause a lot of uncertainty.Why a 38-year-old earning a 6-figure salary doesn't have a college fund for her son: ‘I expect him to get his own money'
Fed Rate Cut Portfolio Repositioning Small-Cap Stocks Fixed Income Macroeconomic Environment
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