Fighting For Binomo: The Samurai Way

Most of us know where you can invest money in good times, but when it looks like the sky might 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 are not aware, so let’s have a closer consider 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 since they pay peanuts. But what if the sky starts falling: either interest levels ignite and/or the stock market tanks? Either way or both… where you can invest money may be the question of the day. Safe choices can look like good investments for parking money that must definitely 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 might not be offset by gains in bonds… as was the case going back 30 years or so. If interest rates soar from today’s record-low levels, neither stocks nor bonds appear to be 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 (because 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. That is the way it works. How to spend money on bonds in 2014 and 2015 if rates take off: lighten up and choose safety.

Stocks had been very good 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 you can invest money because nothing looked cheap except for money (short-term interest rates 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 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 the vast majority of stocks get hit when the market crumbles – but at the very least a few will be good investments. And the best way to find good investments in a bad market would be to watch the purchase price action. For example, as 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 you can invest money to have a piece of this action. 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 new challenge to today’s investor searching for where to invest money. We are facing uncharted waters in this modern electronic world, where no one really knows how exactly to invest or where to find good investments for future years. This consists of 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’ll have cash reserve, to help you take advantage of the situation as the skies darkens. Smart investors are always searching for where to invest money next, especially when a 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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