The issue of interest rate cuts is still about when. With inflation continuing to ease and signs of economic slowdown increasing, people hope that the Fed will relax its policies as soon as possible, possibly in September. However, some people believe that the Fed may wait until December or even 2025 to begin cutting interest rates.

After several false alarms earlier this year, investors should abandon attempts to determine the exact date of rate cuts and start preparing for the inevitability of lower rates.

"Cutting rates once or twice this year is not important, what is important is that the hiking cycle has ended," said Christopher Marangi, chief investment officer at Gabelli Funds value.

He believes that investors should prepare for an economic slowdown, but not necessarily a recession. "We should invest in companies that are more defensive and affected by declining interest rates," Marangi said.

He is particularly bullish on high-yield and more defensive stocks such as wireless infrastructure company American Tower Corp (AMT.N), wind energy and data center leader Alliant Energy (LNT.O), broadband giants Comcast (CMCSA.O) and Verizon (VZ.N), and packaged food king Kraft Heinz (KHC.O). The dividend yields of these five stocks range from 3% to 6%.

Rate cuts could also boost housing-related stocks. The recent surge in mortgage rates has made some investors and potential homebuyers panicky, but lower rates should bring some relief.

Jay Woods, chief global strategist at Freedom Capital Markets, recommends Toll Brothers (TOL.N) and KB Home (KBH.N). "They have performed better than their peers in the recent slump, and if rates continue to fall and the Fed gives some support, I think these two companies will continue to perform well," Woods said. These two stocks trade at approximately eight times earnings estimates, consistent with their historical average levels.

Housing rebound is not only good for builders. Brett Kenwell, a US investment analyst at eToro, says he is keeping an eye on Home Depot (HD.N) and paint manufacturer Sherwin-Williams (SHW.N). Kenwell also believes that rate cuts could boost sales of major car stocks such as General Motors (GM.N), Tesla (TSLA.O), and Ford Motor (F.N). "More explicit rate cut expectations should be favorable for these companies," he said.

Marangi said the Fed does not need to cut interest rates significantly. The good news is that with the federal funds rate currently in the range of 5.25% to 5.5%, if the economy cools too quickly, Fed Chairman Jerome Powell and his colleagues have enough room to take a more proactive approach to easing policies.

"If the economic hard landing exceeds expectations, the Fed still has ammunition," Marangi said, adding that as long as the trend of interest rates is down rather than up, rate-sensitive stocks should perform well.