Ashish Shah, Chief Investment Officer for Public Investments at Goldman Sachs Asset Management, suggested in an interview that investors should focus on small cap stocks because the market generally expects the Federal Reserve to start lowering interest rates. Shah pointed out that with the rate cut, small companies with a higher proportion of floating rate loans would be the primary beneficiaries. However, he also cautioned investors to consider the quality of loans when making investment decisions.

Shaah is cautious about the small cap stocks in it, as the index includes some lower quality meme stocks. He personally prefers E-mini Russell 2000 Index $GOLDMAN SACHS SMALL CAP CORE EQUITY ETF (GSC.US)$ , which is a collection of high-quality companies that he is bullish about and has both growth potential and value. He believes that the high-quality small cap strategy is expected to perform well in the next 6 to 12 months.

So far this year, the performance of the Goldman Sachs Small Cap Core Stock ETF has outperformed the Russell 2000 index (up 11.5%) and the S&P 500 index (up 17%). Shah predicts that with the arrival of January, the best investment period for small caps will also arrive.

For large cap stocks, Shah recommends investors to adopt the common practice in the market, which is diversifying the portfolio. He pointed out that over the past one or two months, large cap stocks have experienced significant outflows, possibly because investors have been overly invested in these large cap stocks. He warned that without timely adjustments, one might miss opportunities to lock in profits and stock market returns.

By Thursday evening, the market expected that there is over 60% probability that the Federal Open Market Committee (FOMC) will lower the benchmark interest rate by 25 basis points from the current range of 5.25% to 5.5%. This prediction has sparked discussions about the possibility of a larger rate cut of 50 basis points.The Federal Open Market Committee (FOMC)This prediction has sparked discussions about the possibility of a larger rate cut of 50 basis points.

Shah also mentioned the uncertainty of the November U.S. elections, expressing concern that this might lead to investor indecision and consequently missing investment opportunities. He suggests that investors should actively consider small cap stocks to potentially achieve better returns in the current market environment.

Finally, Shah listed some ETFs that track small cap stocks, including$iShares Russell 2000 ETF (IWM.US)$,$iShares Core S&P Small-Cap ETF (IJR.US)$,$Vanguard Small-Cap ETF (VB.US)$And.$DIMENSIONAL U.S. SMALL CAP ETF (DFAS.US)$，providing investors with a diverse range of choices.

Will the Federal Reserve cut interest rates as expected by the market in this meeting? What impact will it have on the stock market? Welcome mooer to make an appointment to watch the September FOMC interest rate meeting~

Editor/ping