2024-11-30 06:13:00 ET
Investing in an exchange-traded fund (ETF) that can benefit from interest rate cuts can be a great move to make right now, as more cuts look to be on the horizon. According to projections from JPMorgan Chase , there could be another rate cut in December followed by more next year -- it expects one per quarter.
One ETF that could soar on those developments is the Vanguard Real Estate Index Fund (NYSEMKT: VNQ) . Although it has generated double-digit gains this year, it could be due for a much bigger rally in the months ahead.
Real estate investment trusts (REITs) offer investors a great way to gain exposure to real estate. They collect recurring rent payments from tenants and can benefit from rising valuations in real estate. As interest rates come down, that can reduce costs for tenants and lessen the risk of defaults. At the same time, lower rates can result in a hotter housing market, sending real estate valuations higher. It sets up a situation where REITs can potentially make for ideal investments to hold in your portfolio heading into next year.
