How To Play A Rate Cut
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Created by mock portfolio
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Date updated:08-13-2007

Right now, the market seems torn: is inflation, indeed, decelerating, as the Fed seems to be forecasting? Or is it about to pick back up again?

Here are some ideas on how to set up your portfolio if you believe inflation is decelerating, and that the Fed will soon cut interest rates.

(if you can think of any stocks, ETF's, or mutual funds that I don't already have here, please tell me, and I'll add them in)


By: Matthew

symbol name last price % change open
  • +
  • LMVTX
    Legg Mason Value
  • $27.73
  • -5.52%
  • $N/A

The Play: "Legg Mason Value Trust" The Thinking: Bill Miller - "Value Trusts"'s portfolio manager - is extremely bullish for 2007. As Mr. Altucher pointed out elsewhere, if you're bullish for 2007, you might as well start here...

People owning LMVTX also tend to own: BACCGMFXDODFXDOMFAIRXGEHSGFX

TheStreet.com Rating: No Rating What is this?

  • +
  • MRVL
    Marvell Tech Grou
  • $6.57
  • -2.52%
  • $6.79

The Play: "Marvell Technology" The Thinking: This thing can move. Volatile as all heck. Also, a fed cut should mean an increase in risk-appetite, which would basically mean an increase in the desire for Marvell...

People owning MRVL also tend to own: ACIWADMADSAZPNCERNCKFRCREE

TheStreet.com Rating: C What is this?

  • +
  • GLW
    Corning Inc
  • $10.97
  • -2.92%
  • $11.18

The Play: "Corning" The Thinking: It's product line should make it a leader in an up market. In addition, it seems to be a favorite for hot money lately...

People owning GLW also tend to own: AOBCOGOCRYPGELGRMNGSMDRX

TheStreet.com Rating: C What is this?

  • +
  • CTXS
    Citrix Systems
  • $19.97
  • -2.44%
  • $20.50

The Play: "Citrix Systems" The Thinking: Spurred by a rate cut and future earnings increases (?), CTXS could move higher.

People owning CTXS also tend to own: AAPLDISGOOGGRMNINTCLVLTMSFT

TheStreet.com Rating: C+ What is this?

  • +
  • MGRIX
    Marsico Growth Fu
  • $13.12
  • -4.72%
  • $N/A

The Play: "Marsico Growth" The Thinking: In an up market, Marsico's alpha is incredible...

People owning MGRIX also tend to own: BACMFCFXMFOCXMIOFXMXXIXWGGFXADBE

TheStreet.com Rating: No Rating What is this?

  • +
  • WFC
    Wells Fargo & Co
  • $31.30
  • -4.11%
  • $31.84

The Play: "Wells Fargo" The Thinking: Good long-term growth capacity, terrific management. Rate cuts should propel investors to the best bank around. A rate cut would also alleviate recent fears (about subprime exposure) that have been hanging over the stock.

People owning WFC also tend to own: ASHATGBACCBMNINFBNI

TheStreet.com Rating: B+ What is this?

  • +
  • GS
    Goldman Sachs Grp
  • $115.06
  • -5.18%
  • $117.19

The Play: "Goldman Sachs" The Thinking: One of the key leaders during a move up. If a rate cut occured, this trend should continue. In addition, the likely pick-up in market activity should bode well for GS's earnings for 2007...

People owning GS also tend to own: AOBCOGOCRYPGELGLWGRMNMDRX

TheStreet.com Rating: C What is this?

  • +
  • BSC
    Elements Bg Sm Cp
  • $6.49
  • -6.62%
  • $6.71

The Play: "Bear Stearns" The Thinking: A rate cut would alleviate fears over BSC's exposure to the current subprime mortgage situation. The fact that it's such a high-quality company, as well as its low multiple, should only help it further... Benefits from up markets as well...

People owning BSC also tend to own: AAPLDEERTSGROWLFCPBRARNA

TheStreet.com Rating: D+ What is this?

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