The Biggest Winner as Rates Come Down
Alex Moschina|August 17, 2024
Who will benefit most when interest rates start to come down?
The American consumer, certainly. It’s been a tough row to hoe for young folks – and not-so-young folks – trying to buy homes with borrowing rates at 6% or even 7%.
And with credit card balances soaring to unprecedented levels, we can only imagine the sighs of relief among debtors who will soon have a shot at negotiating lower rates.
According to LendingTree, the current average APR on a new credit card is a whopping 24.92%.
Yowza.
But listen, this is an investing rag. So rather than focus on how the average American can crawl out of the red, let’s instead look at the likeliest winner among stocks.
The answer should be obvious to anyone who’s been following along.
It’s artificial intelligence.
You can already see it in the recent performance of the Global X Artificial Intelligence & Technology ETF (AIQ). Just look at how the promise of a rate cut in September has driven up shares in only the past week…
It’s easy to see why.
The billions of dollars invested in AI innovation over the past year – while borrowing rates soared – could quickly turn into trillions as rates come down.
And while tech in general benefits from lower interest rates, when debt is cheap, it’s the smallest, most innovative companies that grow quickest.
With the Fed finally about to make its move, smallcap tech stocks… especially smallcap AI stocks… should be on every investor’s radar.
But you’ll want to act quickly…
If you’re an investor looking to buy shares of these companies at a discount, this is the time, while prices are still recovering from recent volatility.
Shah had some good advice last week for picking up stocks on the dip.
You can check that out here if you missed it.
Note: With AI, we’re about to witness the biggest capital wave in history. But you’ve got to ask yourself… why should you buy Microsoft, Alphabet or Nvidia when young companies can deliver 10X, 20X and even 30X gains? Get the details here on not one, not two, but THREE companies with this type of potential.
Alex Moschina
Alex Moschina is the associate publisher of Manward Press. A gifted writer, editor and financial researcher, Alex’s career in publishing began more than a decade ago when he worked at one of the world’s leading providers of academic research and reference materials. Alex first cut his teeth in the realm of investing when he joined the team at White Cap Research in 2010. There he was charged with covering emerging market trends and investment opportunities. A stint as senior managing editor and editorial director at the prestigious Oxford Club followed. A frequent speaker at conferences and events, Alex has led educational workshops across the U.S. and Canada.
