Most of us know where to invest money in good times, 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 might 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 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 look like good investments for 2014 because they pay peanuts. But what if the sky starts falling: either interest levels ignite and/or the stock market tanks? In any event or both… where you can invest money is the question of your 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 is probably not 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 appear to be good investments.

For over 30 years interest rates 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 won’t 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 is the way it works. How exactly to invest in bonds in 2014 and 2015 if rates take off: reduce 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 levels were set at about one-tenth of one percent). With an increase of over 150% in five years, the downside risk in the currency markets is mounting. 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 truly a market of stocks, meaning that the vast majority of stocks get hit once the market crumbles – but at the very least a few will undoubtedly be good investments. And the best way to find good investments in a negative market is 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 spend money on or how to select a specific gold stock… you might like to know where you can 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.

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 exactly to invest or how to locate good investments for the future. 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, because the tide will turn eventually if not in 2014 or 2015. Then you will have a cash reserve, so that you can make use of the situation as the skies darkens. Smart investors are always in search of where you can invest money next, especially 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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