Buy These 3 Sectors to Profit When Rates Fall

[The Bleeding Edge]( Colin’s note: Today, I’m continuing my mission to help folks bid farewell to 2023… And prepare for 2024… In Monday’s video, we looked at what you can expect next year regarding interest rates and how a rate-cutting cycle will impact markets. And today, I’m sharing with you three sectors that have struggled this year that I believe will thrive when the Fed starts cutting rates… which I expect we’ll see sometime next spring. It’s all in today’s video… Or, if you prefer, you can read the transcript below that we’ve edited for flow. --------------------------------------------------------------- Hello everyone, Colin Tedards here. This week, I’ve been starting to set the stage as we prepare to leave 2023 behind… and helping folks strategize for 2024. [On Monday]( we looked at what to expect regarding interest rates next year – the start of a Fed rate-cutting cycle… a potential crash… and plenty of volatility. One thing I like to do at this time of the year is identify some sectors that didn't do so well during the year… But are probably set for a rebound in the next. And I’m confident the three sectors I’m going to talk to you about today are set for a breakout year in 2024. Now obviously no one knows what’s going to happen next year… But I am confident the Federal Reserve is done hiking interest rates. We should see a reversal by the spring of next year. That’s my macro thesis on interest rates. And until I see data that proves otherwise, it’s the direction I believe things are heading. Yesterday we got a view of inflation from the Fed that didn’t change my expectations heading into next year. Currently, the market’s expectation is for several rate cuts beginning in May. Recommended Link [Trade this one stock to make money in any market]( [image]( What if you could ignore 99% of the entire stock market… and still have the chance to make money in bullish AND bearish conditions? Sadly, most folks don’t even see triple-digit returns in a single year – or even in 10-years… But today, millionaire trader and former professional money manager Jeff Clark, is revealing his trading breakthrough… He’s used this secret to help 170,000 regular folks have the chance to see triple-digit gains over 48 times and double-digit gains over 81 different times. The key: Don’t over-complicate things. [Watch Jeff Demonstrate His ONE Stock Trade Now.]( -- So let’s look at the struggling sectors I think should be on your radar when the Fed starts cutting rates… First up, one sector that has struggled this year but would benefit from rates dropping? Dividend stocks. Think about it. Investors who have had to rely on income were forced into dividend-paying stocks as the Federal Reserve kept rates near zero for as long as they did. Now with money market funds paying 4% to 5%, it has made far less sense to buy into a dividend stock or fund that’s going to return less. We can see that in the performance of the popular Schawb Dividend Equity ETF (SCHD) underperforming the broader markets. It’s down about 5% over the past year. Depending on how much interest rates fall in 2024, dividend stocks could be set for strong inflows of funds next year. So dividend stocks are a pretty safe bet for 2024. Even if rates stay the same or rise a tiny amount, they should give you a decent return. This next pick is more for investors who want to take some real risk. That’s because this sector has been decimated by higher rates and investors fleeing to the safety of mega-cap technology and money market funds. And that sector is the solar industry. This sector has had a rough go in 2023… It’s responsible for the two worst-performing stocks in the S&P 500 over the past year – Enphase Energy and SolarEdge. Higher interest rates have slaughtered the solar industry. Installs are often financed. And in the near-0%-interest days, the solar industry soared. That’s where things get exciting. If you get a meaningful reduction in interest rates, the solar industry is set to benefit. In my opinion, the solar industry is a pretty risky bet… only because rates would need to see a meaningful reduction and there’s political risk. But the risk-reward setup is one of the largest I see in the market today. And lastly, for those looking for high upside with a fairly simple way to play it… this next pick is for you. It’s a sector I’ve written quite a bit about… And that’s small-cap stocks. With rising interest rates, investors had no patience for the no-profit, hope-and-dream type of companies. [I made a call on small-cap stocks]( back in September when – based on technical analysis – the Russell 2000 index was starting to flash buy signals. I believe small-cap stocks will continue to rally into 2024 as the excitement of earning 4% in a money market fund pales in comparison to what the small-cap index can make in a good year. Now, I admit I was a bit early on my small-caps call… But the Russell 2000 has rallied more than 11% in the past month. That’s because the best investors are always looking ahead… making an educated assumption on the macro environment… and applying that to sectors that will benefit. And if you take anything away from this video it’s that you shouldn’t wait for Jerome Powell to signal all clear on the economy. By then, some of the biggest gains will be over. The same thing is true if you think the economy will fall apart in 2024. No matter which direction you think things are heading, the time to position yourself is now. Let me know what you think about the direction of the economy. You can write us at feedback@brownstoneresearch.com. I’m always open to hearing what everyone thinks. I’ll be back later this week. My name is Colin Tedards, that was today’s issue of The Bleeding Edge. I hope you have a great day. --------------------------------------------------------------- Like what you’re reading? Send your thoughts to feedback@brownstoneresearch.com. IN CASE YOU MISSED IT… [Viral video about Tesla driving 752 miles on a single charge]( A prototype Tesla is sending shockwaves through the auto industry: It drove 752 miles… across the ENTIRE state of Michigan… On a single battery charge! The secret? A new type of battery I call “Forever Lithium.” Musk was so blown away… That, within a month, he announced his entire fleet would be switching to this battery. And that “Forever Lithium” will “emerge as the dominant chemistry for Tesla.” You don’t need to own an EV now or plan to buy one to profit from this switch. Because a few miles south of this experiment… An [obscure Indiana firm]( is now positioned to mint more millionaires than the rise of Tesla. They’ve inked a deal to produce “Forever Lithium” inside a new $3 billion battery facility. And investors who take a stake now could be richly rewarded. [Click here for the full video report.]( [image]( [Brownstone Research]( Brownstone Research 55 NE 5th Avenue, Delray Beach, FL 33483 [www.brownstoneresearch.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Brownstone Research welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-512-0726, Mon–Fri, 9am–7pm ET, or email us [here](mailto:memberservices@brownstoneresearch.com). © 2023 Brownstone Research. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Brownstone Research. 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