What investors can do to prepare

Big changes may be ahead for the U.S. economy between now and the end of the year.

Investors can get ahead of those changes by taking steps to prepare now, experts say.

The Federal Reserve last week slashed interest rates by 50 basis points, in a move expected to kick off more cuts, Racquel Oden, U.S. head of wealth and personal banking at HSBC said Wednesday during CNBC’s Women & Wealth event.

“We know there needs to be a continuation of rate cuts,” Oden said. “The new debate is the question, is the next one going to be another 50 [basis points], or will it be 25 [basis points]?”

HSBC expects there will likely be a 25-basis point rate cut in November, followed by another cut of the same size in December, for a total of 100 basis points by the end of the year.

For consumers, lower interest rates will lower the cost of borrowing on everything from mortgages to credit cards to auto loans. But it will also mean lower returns on cash savings.

The good news is the pace of inflation has come down, Oden noted. Meanwhile, consumer confidence and spending have stayed strong.

Yet the U.S. faces another looming uncertainty with the upcoming November election. Market volatility, which tends to increase in September, will likely continue in October, according to Oden.

“Pre- and post-election, we will still see some volatility,” Oden said.

Investors who withstand the markets ups and downs may be rewarded.

Market rallies traditionally follow elections, Oden said. Moreover, the fourth quarter earnings season also tends to send markets higher.

“We do believe there’ll be a strong fourth quarter rally,” Oden said.

For investors — especially women, who are more likely to second-guess their decisions — having confidence can help, especially in uncertain times, she said.

“We all get what I call decision paralysis, because we’re worried about failure,” Oden said. “What we have to do is really change that pendulum to be really focused on not on failure but .. the opportunity for success.”

The best policy for any investor is to have a plan and stick with it, said Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Fla.

“No matter what happens with rate cuts or volatility, you should have that investment policy and let that be your road map,” said McClanahan, who is also a member of the CNBC FA Council.

For example, if you’re young and can afford to take risks, you may have more of your portfolio in stocks and less in bonds, McClanahan said. Older investors who are closer to retirement, and therefore more risk averse, may want to have a more even stock-bond split.

With interest rates poised to decline, investors would also be wise to lock in today’s higher interest rates on cash, where they can, McClanahan said.

The easiest way to do that is to buy certificates of deposit, particularly those with longer terms, she said.

“They don’t pay as much as one-year CDs, but you’re locking that rate in for five years,” McClanahan said.

“If interest rates go down next year, you’ve got that higher interest rate paying you for at least five years,” she said.