Most of us know where you can invest money in good times, but when it looks like the sky may be falling, knowing where you can invest money and how 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 not a prediction, but instead a “heads up.” You can’t prepare if you are not aware, so let’s have a closer consider 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 currency markets tanks? Either way or both… where you can invest money is the question of your day. Safe choices can look like good investments for parking money that must definitely 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 might 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 levels were falling and bonds were generally good investments. With today’s ridiculously low rates (created by our government to stimulate the economy) a rebound in interest levels is in the cards (because the government unwinds its stimulus). When that happens, bonds will no longer be where to invest money for higher interest income with relative safety. Bonds are NOT good investments when rates rise; they lose money. That is the way it works. How exactly to invest in bonds in 2014 and 2015 if rates take off: lighten up and opt for safety.
Stocks had been excellent investments five years running because the year 2014 began. This is at least partly because of government stimulus and cheap money. In a sense, stocks were where to invest money because nothing looked cheap aside from 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. https://www.binomo.or.id This begs the question of how exactly to invest money in stocks if the sky starts to check ominous.
Remember that the stock market is actually a market of stocks, meaning that the vast majority of stocks get hit when the market crumbles – but at the very least a few will undoubtedly be good investments. And the ultimate way to find good investments in a negative 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 should know where you can invest money to get a piece of this step. The answer would be to invest profit gold funds and let them pick the gold stocks for you.
The bottom line is that in 2014 and 2015 investors face an uphill battle, because both stocks and bonds look pricey. That presents a fresh challenge to today’s investor searching for where to invest money. We have been facing uncharted waters in this modern electronic world, where no one really knows how exactly to invest or how to locate good investments for the future. This includes the big investors like life insurance coverage companies and pension funds.
My suggestion would be to take some profits in your stocks and bonds, as the tide will turn eventually or even in 2014 or 2015. Then you will have a cash reserve, in order to take advantage of the situation as the skies darkens. Smart investors are always in search of where you can invest money next, particularly when a change of trend is in the cards. At such times, yesterday’s underperforming sectors or industries often become today’s good investments.
Tuesday, November 28, 2023