It’s time to run – not walk – from any cash holdings you have now that the Fed is hinting at another short-term interest rate cut, Cramer said.

The short-term rates are the same rates a bank offers. So as the Fed cuts, cash investments are worth less and less. Cramer thinks the Fed could slash rates as much as 1% over the next year. That means banks won’t be paying out the same interest 12 months from now. So holders of certificates of deposit – and people in cash or municipal bonds, for that matter – need to switch out for stocks, he said. Even CDs with a locked-in rate aren’t worth it because more money can be made in stocks as rates come down.

Cramer already gave a list of stocks he thinks investors should be in as this horrible market bottoms. Think best-of-breed Goldman Sachs

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[GS  Loading...      ()   ] or worst-of-breed but likely to rebound Citigroup

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[C  Loading...      ()   ]. But for investors who are looking for steady income similar to that of a cash investment, Cramer recommended preferred stock.

Preferred stock is sort of like a cross between a stock and bond, and it carries with it very high dividends. Thanks to the credit crunch, these dividends have grown even higher. A lot of companies offer preferred stock, so Cramer recommended it for anyone looking for regular cash flow.

The financials offer big yields, too. If the Fed cuts rates, those stocks also might be worth a look, Cramer said.

The bottom line is that cash is no longer king. So if you’re looking to keep the yield you’ve been enjoying from a CD or another cash investment, think about some preferred stock instead, or even the financials.

Jim's charitable trust owns Citigroup and Goldman Sachs.

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