Lower interest rates could boost these stocks & sectors

Miramar Capital co-founder and senior portfolio manager, Max Wasserman, joins Morning Brief host Julie Hyman to discuss portfolio diversification and which stocks and sectors are poised to benefit as interest rates continue to come down.

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Video Transcript

00:00 Speaker A

We've been talking to a lot of investors as well about diversification. Um and that means something a little bit different to everyone. and I think in your case it means something a little bit different too. I'm curious about your strategy around sort of what you view as stocks that'll benefit as interest rates come down more.

00:23 Speaker B

Sure. I mean, we diversify. We have individual dividend growth stocks. So we have the tech, which represents about 25, 27% of our portfolio right now. And then we're out, we're diversified in health care, consumer staples, energy, cyclicals.

00:37 Speaker B

So we think as interest rates come down, those companies are going to benefit for that. You know, refinancing could help the housing market, companies like Home Depot which we have an investment. Uh McDonald's, we think as people have become more discriminatory in what they spend. Um but we like the defensive names, they're still growing, but not trained at these crazy multiples. We like health care, right? You're getting paid a nice dividend, 3 to 4% on average for some of these pharmaceuticals. and companies like AbVs a big investment for us, Waste Management is another good company.

01:11 Speaker B

But we have a barbell strategy. We've seen this before. My partner and I've been around a while from the white hair on my face. and we've seen when momentum changes and when it changes, it gets ugly quickly.

01:26 Speaker B

So we're telling people have a little diversification outside these portfolios because what's happening now, the investor says, why should I own anything outside of tech because everything else is going down. Basically, there's everybody's selling everything that's non-tech and piling into the AI trade and second derivatives to the AI AI trade.

01:44 Speaker B

So they're creating really great risk reward outside of AI and it's become such a momentum trade in AI, it's very hard to make money at this level.

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