As the Federal Reserve gears up for its first interest rate cut at its September meeting, Wells Fargo Investment Institute senior global market strategist Scott Wren joins Morning Brief to discuss how investors can best position their portfolios for easing rates.

Wren believes that the bond rally will likely come to an end, and encourages investors to take profits from bonds and move into stocks. "We use short-term fixed income as a parking spot. We had been overweight long-term bonds. But you know, we've seen a good rally. So we would take money from bonds, both short-term and long-term, and we would move that into the S&P 500 (^GSPC)," he explains.

He also encourages being neutral weight on the Russell 2000 (^RUT), as small caps stand to benefit from an interest rate cut. Wren notes that he still prefers large caps over small caps, and points to sectors like energy and communication services as attractive areas.

"We've taken a step toward moving out of bonds after this big rally. We've tried to take advantage of lower stock prices and to buy some equities here because certainly, you know, we think the S&P is going to be near 6000 at the end of next year. We want to take advantage of any pullbacks. We don't think interest rates are going to go lower," he concludes.

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This post was written by Melanie Riehl