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Beware Long-Maturity Yields: Gottlieb

Wednesday, 13 Feb 2013 | 6:24 PM ET
Beware Long-Maturity Bonds: Gottlieb
The great rotation from bonds into equities is happening, David Gottlieb of EMF Financial Products says.

Investors should be wary of long-term yields on bonds with maturity rates longer than five years, David Gottlieb of EMF Financial Products said Wednesday.

"We think that investors are supposed to be focused in the short-intermediate part of the yield curve. There's less capital risk there. The Fed is anchoring rates to some degree in the five-year-and-under bucket," he said. "It's really longer maturities where the risks are."

On "Fast Money," Gottlieb said that investors are vulnerable to a pick-up in volatility.

Asked whether it was possible to make money in bonds, Gottlieb appeared to answer from a defensive outlook.

"The first thing you want to do is not lose, and the risks in the long end of the curve are growing, from a spreads standpoint and from an outright risk-of-rates-rising standpoint," he said.

"Can you actually make money in the five-year-and-under bucket? Five years yields 90 basis points, so you're not being paid a lot to be in fixed income at all, which is one of the reason why the rotation, if it begins in earnest, you're going to see it play out over multiple quarters, multiple years."

Gottlieb added that the rates rising wouldn't be "a tomorrow thing," but that it would likely occur over the course of several years.

Trader disclosure: On Feb. 13, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Tim Seymour is long AAPL; Tim Seymour is long BAC; Tim Seymour is long INTC; Tim Seymour is long SBUX; Tim Seymour is long BLK; (as of 2/12) Karen Finerman is long AAPL; Karen Finerman is long AAPL PUT SPREADS; Karen Finerman is long AAPL CALL SPREADS; Karen Finerman is long BAC; Karen Finerman is long C; Karen Finerman is long JPM; Karen Finerman is long XLF; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long MSFT; Karen Finerman is long GOOG; Karen Finerman is short SPY; Karen Finerman is short IWM; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Steve Grasso is long AAPL; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long GOOG; Steve Grasso is long GDX; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long P; Steve Grasso is long PXD; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is funds long HAIN; Steve Grasso is funds long HPQ; Steve Grasso is funds long MU; Steve Grasso is funds long NEM; Steve Grasso is funds long ZNGA; Steve Grasso is funds long GNC;


For Mark Mahaney

A member company of RBC Capital Markets or one of its affiliates managed or co-managed a public offering of securities for eBay, Inc. in the past 12 months. A member company of RBC Capital Markets or one of its affiliates managed or co-managed a public offering of securities for Trulia, Inc. in the past 12 months. A member company of RBC Capital Markets or one of its affiliates managed or co-managed a public offering of securities for Facebook, Inc. in the past 12 months. A member company of RBC Capital Markets or one of its affiliates received compensation for investment banking services from eBay, Inc. in the past 12 months. A member company of RBC Capital Markets or one of its affiliates received compensation for investment banking services from Facebook, Inc. in the past 12 months. A member company of RBC Capital Markets or one of its affiliates received compensation for investment banking services from Trulia, Inc. in the past 12 months.


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