We know it sounds a bit like a conspiracy theory, but it also makes sense. If cash becomes so unattractive maybe you’ll dip your toe elswhere.
Are we right, is the Fed trying to smoke you out?
According to Karen Finerman the short answer is yes. Specifically, she thinks the Fed is trying to spark life into the corporate bond market which has been badly beaten down.
And before they're successful, she suggests getting in. “A lot of holders of debt were very leveraged and investors who owned debt had to sell regardless of price,” she explains. In other words, corporate debt is cheap.
Of course it's not easy for everyone to play corporate debt. If you're an individual investor, Finerman recommends contacting a financial services firm such as Charles Schwab and asking about their high yield fund.
And if the corporate debt market isn't for you there's always the stock market. In fact, Pete Najarian thinks the stock market presents much better investing opportunities than bonds. “But you can’t be willy nilly, you have to pick and choose" he says. “I try to find the stocks that are oversold. Right now. I’m looking at Siemens .”
Guy Adami concurs. "I’d look at Celgene , he counsels . It’s been beaten up and I think it’s a buy.
Well, if the Fed is trying to smoke you out – so far their plan isn’t working.
U.S. Treasury prices jumped on Thursday, driving yields to fresh historic lows, as investors flocked to bonds to try to lock in safe returns at year-end.
Even the growing debt the government has accumulated to fund its menu of programs to resuscitate the economy has not curbed the scramble for Treasuries.
That's not terribly surprising. It's only been a few days since the Fed made it's historic move.
But the question remains, when will you come out of hiding?
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Trader disclosure: On Dec. 18th, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Pete Najarian Owns (RIMM) Call Spread; Pete Najarian Owns (UYG) And Is Short (UYG) Calls; Pete Najarian Owns (HIG) Calls And Is Short (HIG); Pete Najarian Owns (PCLN) Call Spread; Finerman's Firm Owns (IBB), (MSFT), (UNH), (WLP), (AET); Finerman's Firm Owns (ROH) Calls; Finerman's Firm Owns (OIH) Puts; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (BBT), (USO)
Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO: Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.: Virtus Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (OFC), (DLR), (EXR), (IGE), (MAC), (DBC), (DBV), (SKT), (UA), (CLB); Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights
Charles Schwab Is A Sponsor Of "Fast Money; GE Is The Parent Company Of CNBC
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