Perhaps it’s time to look at investing from a different angle. Yes, perhaps its time to put diversification into overdrive and start thinking - and trading - outside the stocks.
When FM Contributor Joe Terranova looks at trades outside the S&P 500 he looks for “alternative investments that aren’t too heavily correlated to stocks." As a result he likes the currency trade because for every dollar move in the S&P, currencies typically move about 30 cents.
Right now Terranova likes playing Canada’s dollar or Australia’s dollar because they’re both primarily driven by resources.
What’s the trade? Terranova suggests looking at the CurrencyShares Canadian Dollar Trust ETF. "It makes you long energy with less volatility and protection from a lot of other things going on in the stock market."
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Trader disclosure: On Feb. 17th, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (AAPL), (AA), (BAC), (EEM), (XOM), (FXI), (YUM); Seymour's Firm Owns (VIP); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (CELG), (ENER); Najarian Owns (GS) Calls; Najarian Owns (EEM) Call Spread; Najarian Owns (FCX) & (FCX) Calls; Najarian Owns (CHK) Put Spread; Najarian Owns (GDX) Call Spread; Najarian Owns (GLD) Call Spread; Najarian Owns (MSFT) & (MSFT) Short Calls; Najarian Owns (MS) & (MS) Short Calls; Najarian Owns (MOS) Call Spread; Najarian Owns (STI) Call Spread; Finerman's Firm Owns (AET), (CRXL), (MSFT), (XBI), (FL); Finerman's Firm Owns (DNA) & (DNA) Call Spread; Finerman's Firm Is Short (USO), (VNO), (BBT), (IYR), (IJR), (IWM), (MDY), (SPY)
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