Yaacov,
Ok, Here's my answer as a Junior Fund Manager. :-)
1 & 2) A 1/4% doesn't worry me too much but anything more, Fed's must believe economy is growing to fast and inflation may follow. I would buy defensive stocks, that continue to do well even in a bad/slow economy. PG, JNJ, Walmart, Campbells, Conagra, Phillip Morris (they own kraft don't they??), RJR Nabiso, I know there are many more. To me these are companies that are going to continue to profit even make more money in a down economy, people will need toothpaste, toilet paper, baby wipes, diapers, eat at home more etc. The belts will be tighted and consumers will not buy the xtra's but the necessaties. Buy the companies that have a good yields (dividends), Chrysler is one that comes to mind, there are many more.
Consider but throughly investigate companies that fuel expansions, tech stocks (CSCO, INTC, MSFT etc), office equipment firms, lumber etc, since new housing and buildings MAY be put on hold until interest rates cool down.
3) Look at all the economic numbers,
Are housing starts continuing to increase?? Buy Lumber and companies used to build houses, sell new furniture, furnaces/Air conditioners, appliances.
Is unemployment low or high???
If low buy companies that fuel expansions (listed above) and maybe high price consumer goods companies (Ford,Chrysler).
Is unemployment high??? buy defensive stocks. People without jobs don't buy new cars etc..
Just some of my thoughts If I had millions of other peoples money to invest.
You really didn't specify which type of fund, so I went with growth and income. There are so many types of funds, Tech, emerging growth, index 500's, small cap, large cap.... and the list goes on.
I hope this answers your questions.
Take Care
Ann |
