7 Portfolio Tips for a Falling-Rate Environment: Advisors' Advice

The Federal Reserve's recent 50-basis-point drop in interest rates — and expectations for further cuts in coming months — have many investors and advisors considering adjustments to portfolios. Even as the S&P 500 hit yet another all-time high after the rate cut, Morningstar noted that some top fund managers expect impending stock market rallies to differ from the mega-cap tech bull market in recent years, given that lower rates will boost consumers as well as small businesses. Morningstar also suggested it's time to look at updating bond portfolios to add some risk by replacing cash with long-term bonds, since cash and short-term fixed income yields are sliding. We recently asked advisors what changes they're suggesting for client portfolios now that the Fed is cutting interest rates. Check out the gallery for seven tips to consider. Some responses are edited for length or clarity.