Fun With Inflation
New data released Wednesday suggests inflation is on the rise. So what's the best way to trade it?
Treasury Inflation Protected Securities or “TIPS” are inflation index bonds that investors might want to investigate, says Karen Finerman. Or if that’s too complicated there are mutual funds that will do it for you. Check out the VanGuard Inflation Fund (VIPSX) or Pimco’s (PRTNX).
Forget that, says Guy Adami. Buy defense stocks such as Lockheed Martin (LMT), General Dynamics (GD), Raytheon (RTN), or L-3 Communications (LLL). I think all of these stocks could go higher into the election. Also check out Potash (POT).
I like grains as an inflation trade, adds Tim Seymour. Think about Archer Daniels Midland (ADM) or Monsanto (MON) as a play on food prices that will likely go up.
Buy the streetTRACKS Gold (GLD) or the United States Oil Fund (USO), exclaims Jeff Macke and be done with it!
> Bond Basics: TIPS
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Trader disclosure: On Feb.20, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (HAS), (YHOO), (ATVI); Finerman Owns (GS); Fineman's Firm And Finerman Own (KALU); Finerman's Firm Owns (MSFT), (TSO), (VLO), (YHOO), (AAPL); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM),(COF); Finerman's Firm And Finerman Own (CROX) And (CROX) Options; Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Seymour Owns (AAPL), (MER), (MSFT), (S), (TSL); Seygem Asset Management Owns Gazprom OAO; Seygem Asset Management Owns (NIHD), (GFI); Seygem Asset Management Owns Lebedyanskiy OAO; Seygem Asset Management Is Short (EEM)