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Investors should look to short-term bonds in General Electric, Royal Bank of Scotland and Daimler, Louis Gargour, chief investment officer from LNG Capital, told CNBC.
"I think you need to go up the spectrum in terms of credit quality. Equity is forecasting a company's growth, debt is forecasting a company's viability," Gargour told "European Closing Bell."
Companies with "good strong earnings and recurring coupons," are the one to buy short-dated bonds in "because they will continue to pay their coupons and they will mature," Gargour added.
(Watch the full CNBC interview with Louis Gargour, left).
General Electric [GE
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] is one of Gargour's picks and he recommends buying 18-month debt that yields 15 percent to maturity. (GE is the parent company of CNBC.)
"That looks compelling. I don't think it's going to go bankrupt in the next 18 months," he said.
Gargour is also holding a six-month Daimler bond that gives 11 percent to maturity and a 10-month bond in RBS.
"The tier-one debt of the banks is yielding you between 16 and 24 percent for a two year view," Gargour said.
"The banks are government guaranteed now," he added.
For the Investor:
Pros Say: S&P to Rally Until March 2009
Stocks for a Down Market
Stocks for Healthcare's Shifting Landscape
'Now Is the Time' to Shop Fire Sales
Think Big Cap, Long-Term
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