Most of us know where you can invest money in good times, but when it appears like the sky may be falling, knowing where to invest money and how exactly to invest it becomes a puzzle. In 2014 and 2015 good investments may be hard to find, particularly if yesterday’s good investments like stocks and bonds tank. This is simply not a prediction, but rather a “heads up.” You can’t prepare if you’re unaware, so let’s take a closer look at the sky.
Everybody knows that safe choices like money market funds and bank savings accounts don’t appear to be good investments for 2014 because they pay peanuts. But imagine if the sky starts falling: either interest levels ignite and/or the stock market tanks? In any event or both… where to invest money may be the question of your day. Safe choices will look like good investments for parking money that must definitely be safe.
Wall Street’s traditional answer to where to invest money: put about 60% into stocks with about 40% in bonds holding a cash reserve on the sidelines. Problem: in 2014 and 2015 losses in stocks will not be offset by gains in bonds… as was the case going back 30 years roughly. If interest rates soar from today’s record-low levels, neither stocks nor bonds look like good investments.
For over 30 years interest rates were falling and bonds were generally good investments. With today’s ridiculously low rates (developed by our government to stimulate the economy) a rebound in interest levels is in the cards (as the government unwinds its stimulus). When that occurs, bonds won’t be where to invest money for higher interest income with relative safety. Bonds aren’t good investments when rates go up; they lose money. binomo login That’s the way it works. How exactly to spend money on bonds in 2014 and 2015 if rates remove: reduce and choose safety.
Stocks had been very good investments five years running as the year 2014 began. This was at least partly due to government stimulus and cheap money. In a sense, stocks were where you can invest money because nothing looked cheap except for money (short term interest rates were set at about one-tenth of 1 percent). With a gain of over 150% in five years, the downside risk in the stock market is mounting. This begs the question of how exactly to invest money in stocks if the sky starts to check ominous.
Remember that the currency markets is truly a market of stocks, meaning that the vast majority of stocks get hit when the market crumbles – but at least a few will be good investments. And the ultimate way to find good investments in a bad market would be to watch the price action. For example, as the market climbed 30% in 2013, some gold stocks were down about 50% by early 2014. If you don’t know how to invest in or how to pick a specific gold stock… you may want to know where to invest money to acquire a piece of this step. The answer would be to invest profit gold funds and let them pick the gold stocks for you.
The end result is that in 2014 and 2015 investors face an uphill battle, because both stocks and bonds look pricey. That presents a new challenge to today’s investor searching for where you can invest money. We are facing uncharted waters in this modern electronic world, where nobody really knows how exactly to invest or where to find good investments for future years. This consists of the big investors like life insurance companies and pension funds.
My suggestion is to take some profits in your stocks and bonds, as the tide will turn eventually or even in 2014 or 2015. Then you’ll have cash reserve, in order to make use of the situation because the skies darkens. Smart investors are always searching for where you can invest money next, particularly when a big change of trend is in the cards. At such times, yesterday’s underperforming sectors or industries often become today’s good investments.