Most of the world's major economies are in deflation territory this makes it a bit difficult for investors to find ways to get returns. India was one of the best performers last year their inflation rate is at 5%. I went to a conference a few weeks ago and the speaker stated that the outside world was in a state of deflation as if we were not at risk, we have been experiencing low inflation December rates were 0.8% and January actually had negative inflation -0.1%. In these cases you may be better off just leaving your money in the bank for the short term. With a stronger dollar plus negative inflation your dollar gets more valuable without any risk just by holding on to it. But long term deflation is not a good thing it will stall economic growth. Low oil prices and low mortgage rates signal a drop in prices which can be good for consumers, let's assume the U.S. does not enter bad deflation it just continues with low inflation, investors will need to find a place to leave their money.
The world is looking for yields to grow their money there are no quality investments left out there to park money, no yield to be found. What is scaring people is the risk factor of entering the stock market if the Fed decides to raise interest rates this summer. That concern alone brought down securities on Friday. It is likely to happen our economy has been growing without the Fed's help. If the Fed decides to raise rates by how much will it do so? Most likely stocks will still remain the only way to get decent returns the market may drop a bit with the news but eventually the world will need yield and this can mean that the bull market that started in 2009 will continue for a few more years. It has been said by analysts that we are in the middle of a secular bull market.
In deciding where to put money consider the global economy. If inflation rates remain low then you don't need to make high returns to fight inflation. Where are you going to get those yields from a bank CD? They are safe but will give you very little interest. Real estate is another option the 30 yr fixed is at a low 3.99% yet a lot of people don't have the money to buy or the credit to qualify so renting is becoming more popular than ever. If you believe that the stock market will crash or that it's due for a partial correction then maybe you should just put it elsewhere a business or more education perhaps. Emerging markets are cheap but don't look too attractive. In 2012 I wrote that the stock market was the best choice for investors but now things have changed when I wrote that post the fed was not going to raise rates anytime in the near future and the dow was not at 3 times its price from the 2009 low. Some experts state that the market is not too expensive in regards to earnings. Financial advisers usually recommend that you put 60-70% of your money into stocks that number has recently changed to 50%. Then there are those individuals that experienced the crash of 2000 and then again in 2007 (yikes!), they are hating this bull market because they aren't participating their money most likely is in the bank. Invest carefully, stay informed and make educated guesses while considering your risk tolerance.