7 Portfolio Tips for a Falling-Rate Environment: Advisors’ Advice

3. Consider advantaged sectors.

With the Fed cutting interest rates, I’m advising clients to adjust their portfolios by rebalancing into growth-oriented equities and sectors that may benefit from lower borrowing costs, such as technology and consumer discretionary.

While the market often bakes in speculation about rate cuts in advance, there are still opportunities to capitalize on the positive momentum lower rates can bring.

At the same time, I recommend reassessing bond holdings, as the drop in interest rates can lead to lower yields.

For income-seeking clients, diversifying into high-quality, dividend-paying stocks or considering alternative income-generating investments can help.

Lastly, maintaining global diversification remains crucial, as rate cuts in the U.S. can affect international markets differently, offering additional opportunities abroad.

— Arielle Tucker, lead planner, Connected Financial Planning