From CNBC:

Stock market advisors believe that falling interest rates will benefit companies by allowing them to borrow money more cheaply and invest in their businesses. However, 2024 is unlikely to see a repeat of stocks’ stellar performance from last year, which saw a 24% increase in the S&P 500 U.S. stock index. Tech and growth stocks are better positioned to benefit from these lower interest rates.

Now is the time to lock in CD rates as cash and cash-like investments were among the big beneficiaries of rising interest rates. Rates on cash jumped to their highest level in years. Savers can still find places that offer 5% and locking in rates now is recommended, especially for people with longer CDs.

Bonds have been negatively affected by the Fed’s interest rate hikes, with bond prices falling. However, with falling interest rates, bond funds are poised for a rebound, providing a low-risk way to make money in the bond market. Those with a strong conviction that interest rates will fall may consider buying funds with a longer maturity, which carries more risk.

Real estate investment trusts (REITs) are also expected to benefit from falling interest rates, as they depend highly on the debt market for their business activities and benefit from lower borrowing costs. For investors interested in REITs, it may make more sense to buy within a retirement account to defer taxes on dividends. It’s important to make investment decisions within the construct of a diversified portfolio and hold an adequate amount of stocks relative to age and time horizon.



Read more: The Fed could cut interest rates in 2024. How investors can prepare