What should investors do with their money-market accounts if the Fed reduces rates?
The idea that makes the most sense to me is to look for high-quality municipal bonds. That can be a little difficult, but if you have a bond that’s backed by a very solid set of cash flows, then even in a recession it should be able to keep paying and will probably yield more than the zero that a money-market account will be yielding if the Fed cuts rates much more. I was also thinking possibly some bank CDs if they’re insured, but in both cases you’re giving up the check-writing feature of money markets. Q: What sectors are the best to get into right now? A: There are some really fantastic stocks in certain sectors. In fact, in my newsletter, which is called the Cohan Letter, I picked some pretty good ones earlier this year. One of the best ones was Career Education Corp. (CECO ). I recommended it at $46.44…and it’s trading for $66.92. That whole area of education has been doing fantastically well…it’s one of the best sectors right now. Apollo Group (APOL ), Corinthian College (CO
