The U.S. stock markets witnessed a notable gain following the November jobs report, which painted a robust picture of the U.S. economy. Currently, markets are anticipating around an 88% likelihood of a 25 basis-point rate cut at the December Fed meeting. In this context, Key Advisors Wealth Management CEO and co-founder Eddie Ghabour joined Catalysts Co-Hosts Seana Smith and Madison Mills to share valuable perspectives on how investors should position their portfolios in light of the Fed's upcoming moves.

Unlock the Secrets of Portfolio Positioning with Fed's Moves

Insights on Cyclical Stocks and Small Caps

Eddie Ghabour is closely observing two Magnificent Seven stocks - Meta (META) and Nvidia (NVDA). He reveals, "We’re actually buying cyclicals. We’ve increased small caps. We’ve increased our exposure to Meta and Nvidia." This indicates his strategic approach towards diversifying the portfolio with these growth-oriented assets.However, when it comes to Nvidia, Ghabour has a different stance. He mentions, "While we are buying Nvidia now, once things reach a peak, it will be one of the first names we sell. When we start to see a top or what we believe is a top, we are going to sell the most aggressive holdings in the most highly owned holdings. We love Nvidia as a company and as a stock, but that will be one of the first things we cut because that will take a very big hit in our opinion." This shows his cautious approach and the need to be vigilant during market peaks.

Importance of Fed's Moves on Portfolios

The Fed's decisions regarding interest rates have a significant impact on the stock market and investor portfolios. As markets are pricing in a rate cut, it presents both opportunities and challenges for investors. Ghabour's insights provide valuable guidance on how to navigate these uncertain times and make informed decisions about portfolio allocation.By closely monitoring the Fed's actions and adjusting portfolio positions accordingly, investors can potentially maximize returns and minimize risks. Ghabour's expertise and experience in the market make his views highly relevant and actionable for investors looking to optimize their portfolios.For more expert insight and the latest market action, click here to watch this full episode of Catalysts.This post was written by Cheyenne Reid.