Most folks know where to invest money in memories, but when it looks like the sky may be falling, knowing where you can invest money and how exactly to invest it becomes a puzzle. In 2014 and 2015 good investments may be hard to find, especially if yesterday’s good investments like stocks and bonds tank. This is not a prediction, but rather a “heads up.” You can’t prepare if you’re unaware, so let’s have a closer look at the sky.
We all know 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 what if the sky starts falling: either interest rates ignite and/or the stock market tanks? Either way or both… where to invest money is the question of the day. Safe choices will look like good investments for parking money that must be safe.
Wall Street’s traditional response 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 may not be offset by gains in bonds… as was the case going back 30 years roughly. If interest levels soar from today’s record-low levels, neither stocks nor bonds look like good investments.
For over 30 years interest levels 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 happens, bonds will no longer be where you can invest money for higher interest income with relative safety. Bonds are NOT good investments when rates go up; they lose money. That’s the way it works. How to spend money on bonds in 2014 and 2015 if rates take off: reduce and opt for safety.
Stocks had been excellent investments five years running as the year 2014 began. This was at least in part because of government stimulus and cheap money. In a way, stocks were where to invest money because nothing looked cheap aside from money (short-term interest levels were set at about one-tenth of one percent). With an increase of over 150% in five years, the downside risk in the stock market is mounting. This begs the question of how to invest profit stocks if the sky starts to look ominous.
Remember that the currency markets is actually a market of stocks, which means that almost all stocks get hit once the market crumbles – but at least a few will be good investments. And the ultimate way to find good investments in a bad market is to watch the price action. For example, because the market climbed 30% in 2013, some gold stocks were down about 50% by early 2014. Unless you know how to invest in or how to pick a specific gold stock… you might want to know where to invest money to get a piece of this step. The answer is to invest money in gold funds and let them select the gold stocks for you personally.
The bottom line is that in 2014 and 2015 investors face an uphill battle, because both stocks and bonds look pricey. That displays a fresh challenge to today’s investor searching for where to invest money. Binomo We are facing uncharted waters in this modern electronic world, where no-one really knows how to invest or how to locate good investments for future years. This includes the big investors like life insurance coverage companies and pension funds.
My suggestion is to take some profits in your stocks and bonds, because the tide will turn eventually if not in 2014 or 2015. Then you will have a cash reserve, to help you make use of the situation because the skies darkens. Smart investors are always searching for where to 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.