Top 7 ways to trade the dovish Fed decision

Published Thu, Sep 17 20154:32 PM EDT

The Fed cited recent global financial developments potentially hurting economic activity and exerting downward pressure on inflation as the reasons it did not raise rates Thursday afternoon. CNBC Pro reached out to market experts to find out how investors should trade and position their portfolios after this important central bank decision. Here is what they said... 1) Buy long-dated U.S. Treasury bonds: "My favorite trade remains to own long-dated U.S. Treasury bonds. They continue to earn excellent carry relative to the near-zero funding rate. I also believe that the bullish dollar trend is intact, as central banks around the world are continuing on the easing path."— Alex Gurevich, chief investment officer of HonTe Investments iShares 20+ Year Treasury Bond ETF (TLT) tracks the performance of an index of U.S. Treasury bonds with maturities over 20 years. 2) Buy energy stocks: "Fed recognizes that world, ex-U.S., faces deflation risks, not inflation. The Fed missed its window in 2013/14 to normalize rates. Doing so now would risk global market instability. Asia is particularly challenged by decelerating growth and horrible demographics, restraining pricing power. Near term, I suspect this easy-money persistence allows battered sectors like energy and emerging markets to recover from horrible summer selling."—Steve Cortes, senior macro strategist at BGC Partners "We have been liking energy for a few months now and all the more reason to now after Yellen keeps control of the U.S. dollar, the only tool they ultimately have left in their toolbox."—Jeff Kilburg, founder and CEO of KKM Financial Kilburg's favorite energy names are Chevron , Halliburton , BP , Schlumberger and Anadarko Petroleum . Read More Lessons from Lehman: Spotting the next crisis 3) Buy gold: "This statement is good for interest rate-sensitive sectors and gold loves the negative real rates that a zero-bound fed funds promotes. Unfortunately, uncertainty risks will linger and the market turns back to 'China watch' since it will be the primary determinant of growth in the emerging market complex."—Mark Luschini, chief investment strategist of Janney Montgomery Scott Luschini has good company with his call as legendary investor Stanley Druckenmiller made the precious metal the largest position for his family office, according to a June SEC filing. 4) Sell financials: "The FOMC decision to leave rates unchanged today will have a negative impact on the financial sector specifically. The sector has recently been pricing in an expected move by the Federal Reserve at today's meeting. The impact of today's "unchanged" will be negative to the effect that the spread that financial institutions monetize will have to wait until later in the year."—Peter Kenny, chief market strategist at the Clearpool Group. 5) Buy biotech: "The Fed blinked so hard that a lot of investors are going to wonder if they are hiding under the covers with their eyes closed. Investors in risk-on areas like biotech ... are yelling 'Game On,' pushing the hockey goals back into the middle of the street, and walking all over the Fed and its hesitance to shake markets."—Bradd Kern of Armored Wolf, an investment management firm. Read More Why 'sell in May' worked and what to do now 6) Sell mining resource names: "The trade seems to be to sell mining resource names; the group is highly correlated to China to state what is obvious to many. ... With China such a large portion of global demand for copper and steel gotta believe FOMC holding fast on rates is due to the read the Fed is getting on China."—Roberto Friedlander, head of equity trading and sales trading of Brean Capital. Friedlander's list of mining names to bet against include BHP Billiton , Freeport-McMoRan , Newmont Mining , Southern Copper , Rio Tinto , Vale and Teck Resources . 7) More volatility ahead: "With the Federal Reserve showing greater concern for the global backdrop and pulling down mildly their future expectations for growth and inflation the key conclusion for investors has to be more volatility is imminent as the debate between the need for more stimulus or the start of some policy normalization continues."—Chris Bailey of Financial Orbit, a U.K.-based investment research firm. The iPath S & P 500 VIX Short-Term Futures (VXX) is an ETN that provides exposure to the moves in the CBOE Volatility Index (the VIX).

Traders work on the floor of the New York Stock Exchange.

Brendan McDermid | Reuters

The Fed cited recent global financial developments potentially hurting economic activity and exerting downward pressure on inflation as the reasons it did not raise rates Thursday afternoon.

CNBC Pro reached out to market experts to find out how investors should trade and position their portfolios after this important central bank decision.

Here is what they said...

1) Buy long-dated U.S. Treasury bonds:

"My favorite trade remains to own long-dated U.S. Treasury bonds. They continue to earn excellent carry relative to the near-zero funding rate. I also believe that the bullish dollar trend is intact, as central banks around the world are continuing on the easing path."—Alex Gurevich, chief investment officer of HonTe Investments

iShares 20+ Year Treasury Bond ETF (TLT) tracks the performance of an index of U.S. Treasury bonds with maturities over 20 years.