Binomo Smackdown!

Most of us 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 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 rather a “heads up.” You can’t prepare if you’re not aware, so let’s take a closer consider the sky.

Everybody knows that safe choices like money market funds and bank savings accounts don’t look like 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? In any event or both… where you can invest money may be the question of the day. Safe choices will look like good investments for parking money that must be safe. Wall Street’s traditional answer to where you can 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 for the last 30 years or so. 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 rates is in the cards (because the government unwinds its stimulus). When that happens, bonds won’t be where to invest money for higher interest income with relative safety. Bonds aren’t good investments when rates rise; they lose money. That is 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 because the year 2014 began. This is at least in part 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 levels were set at about one-tenth of one 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 profit stocks if the sky starts to check ominous.

Remember that the stock market is truly a market of stocks, which means that the vast majority of stocks get hit once the market crumbles – but at the very least a few will be good investments. And the ultimate way to find good investments in a bad market is to watch the purchase 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 like to know where to invest money to have a piece of this step. The answer would be to invest profit 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 presents a new challenge to today’s investor in search of where you can invest money. We have been facing uncharted waters in this modern electronic world, where no one really knows how to invest or how to locate good investments for the future. This includes the big investors like life insurance 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’ll have a cash reserve, so that you can make use of the situation because the skies darkens. Smart investors are always in search of 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.

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