Market Mavens – Stock Research Made Simple

The Fed Just Cut Rates: What to Do Now

So the Federal Reserve cut interest rates. This was their third rate cut in the last three months. The new target range for overnight interest rates is 1.5 to 1.75%. That’s below the rate of inflation. There are three things you should do right now. #1. Don’t panic. #2. Seriously, don’t panic. #3. Make sure you own a broad, well-diversified portfolio of high-quality growth stocks. I can help you with #3, but for the first two, well…you’re on your own but hopefully #3 will help. Before I go further, let’s look at what the Fed is doing and why. The Federal Reserve’s Game Plan Not that long ago, the Federal Reserve was on a path of increasing interest rates. After all, the economy was slowly getting over its long hangover, and interest rates had been cut to the bone. Things were gradually getting back to normal. In a three-year stretch, the Fed hiked interest rates nine times. Not only that but going by their public statements, they seemed on track for several more hikes. For the most part, Wall Street was cool with that. But then it stopped, and Wall Street got scared. In the fourth quarter of last year,

Continue reading »