NEW YORK (TheStreet) -- Stocks are up on Tuesday, with the S&P 500 ETF (SPY - Get Report) rallying 1.2%. The Federal Reserve's rate-hike decision is due later this week, and the question is, should investors reduce their exposure to risky assets or add to their equity holdings? 

It wouldn't be a bad idea to shy away from risk and have some cash available in the event of a selloff, Josh Brown, CEO and co-founder of Ritholtz Wealth Management, said on CNBC's "Fast Money Halftime" TV show. 

If the Fed does raise rates, stocks could rally, Brown said. Investors hate uncertainty, and so even though higher rates are theoretically a negative for stocks, the certainty would help the stock market. 

Over the last 30 years, there have been seven cycles of rising rates, and in each, the S&P 500 was positive one year after the initial rate increase, Brown added. 

Since the Great Recession, the Fed has added a press conference to its meetings, said Joseph Terranova, senior managing partner at Virtus Investment Partners. That is a very important tool, because it allows the Fed to communicate with investors more clearly. 

The press conference allows the Fed to raise rates and then explain its rationale, outlook and plans for the future. That may keep investors calm and rational. 

Jim Glassman, senior economist at JPMorgan, said the Fed should raise rates, because there's no reason to maintain a zero interest-rate policy. Plus, the economic data have been strong enough to warrant a rate hike, he added. China is important, but investors shouldn't ignore how well the U.S. is doing now. 

Pete Najarian agreed. The co-founder of optionmonster.com and trademonster.com said that while uncertainty still surrounds China, the recent selloff and increased volatility have given investors a great buying opportunity in the U.S..

Stephanie Link, portfolio manager at TIAA-CREF, also agreed. Although she acknowledged that it's "possible" for stocks to retest the lows, she thinks the 3% economic growth in the U.S., coupled with low interest rates and low oil prices, bodes well for consumers and earnings. Specifically, she likes cloud stocks, payments companies, software-security firms and pharmaceutical stocks. 

The housing sector is under close watch because of the Fed. The iShares U.S. Home Construction ETF (ITB - Get Report) and the SPDR Homebuilders ETF (XHB - Get Report) are both up 9%, despite concerns that a rate increase would stymie the rally in homebuilding because affordability would decrease. 

Investors should stick with what's working, as momentum in residential housing will likely continue, Terranova said. He likes A. O. Smith Corp. (AOS - Get Report), which he said has roughly 10% to 15% upside by year's end. He also likes Martin Marietta Materials (MLM - Get Report). 

Link added that housing starts and permits are up 11% and 15% year-over-year, respectively. The demand for housing is clearly there, and while she likes the homebuilders, she also likes suppliers such as Louisiana-Pacific (LPX - Get Report) and Eagle Materials (EXP - Get Report)   even more. 

Brown said that investors shouldn't forget rates that are going to climb slowly. It's likely the Fed will raise rates just 25 basis points this year, and by 2017, rates will be at 1.75%, at the high end. That shouldn't slow down real-estate investment trusts too much, which have portfolios of good properties in strong markets. His top housing pick is D.R. Horton (DHI - Get Report) . 

A rate increase could actually be a good thing, even though it will make housing more expensive, Najarian added. 

Najarian explained that higher rates could push people who are sitting on the fence into buying a house, because they would know that rates have hit a bottom. Long term, a rate hike wouldn't likely slow housing growth, he said.