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The Fed’s decision to hold rates steady through 2014 puts a slew of stocks in play.
That’s largely because the potential of ‘lower for longer’ is expected to push more money out of Treasurys and into stocks as investors seek better returns.
How should you position ahead of a rotation. The Fast Money traders have a few ideas.
Karen Finerman
Fast Money’s chairwoman thinks Microsoft looks all the more attractive after the Fed. Although the stock has spiked over the past few weeks, she thinks there’s more upside. “It pays a nice dividend and generates decent earnings growth,” she says. Both are criteria that could be attractive to conservative investors.
Pete Najarian
The Pit Boss thinks big pharma names such as Pfizer and Merck could now become all the more attractive. “These stocks generate dividend yields of about 4%,” he reminds. That’s way better than Treasurys.
Joe Terranova
Rather than play stocks, the Liquidator suggests playing a rotation out of Treasurys and into other types of bonds. “Corporate bonds should do well in a low rate environment,” he says. "You can play it with the LQD. Also he says, don’t forget about utilities.
Mike Khouw
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