This is your last month to prepare

All signs are pointing to September.

That’s when we could finally see significant changes in economic policy that could have an impact throughout the financial markets.

This month could be your last chance to prepare, so here’s what you need to know…

The Federal Reserve and chairwoman Janet Yellen have been talking about rate hikes for quite some time. Now it looks like that time is finally right around the corner.

For one thing, the 2% target the Fed has had for a particular gauge of inflation is now within reach. A report last week said that we experienced a 2.2% rise in the PCE price index and a rise of 1.8% in the “core” PCE from the 1^st quarter to the 2^nd.

Plus, good news coming out of the labor market revealed solid job gains and declining unemployment.

And last but not least, a couple of days ago Federal Reserve Bank of Atlanta President Dennis Lockhart all but spelled out that the Fed was leaning quite strongly toward rate hikes next month.

That’s clue after clue pointing in the same directing. And that means we now have a chance to get prepared for the rate hikes.

Now, it’s definitely worth noting that the expected Fed plans are to very slowly ease in rate hikes, so keep that in mind.

What you should also keep in mind is that rising rate lead to less spending and eventually the lowering of stock prices in general. However, there’s general a 12-month lag when it comes to seeing the real impact of interest rate hikes.

What I’m more interested in is how you and I can take advantage of the rate hike news and profit. How can we do that?

I’m focusing on 2 market sectors right now…

First, consumer discretionary stocks could stand to ride a big wave of gains as rate hikes begin. A big reason why the Fed is thinking about raising rate in the first place is that the labor market is healthy, so more job security for America in general means more likelihood for America to spend on “wants” like new cars or homes or vacations, etc.

And the second place I’m interested in is the financial sector. Obviously banks stand to benefit from increasing interest margins, but the even better news for financials is the fact that positive economic conditions have brought about the impending rate hikes. That means people are still likely to spend more right now, and the higher interest rates will create more profit for the banks.

And don’t sleep on the higher returns insurance companies will begin seeing as a result of higher interest rates.