Where to go now? (investment-wise that is)

The stock market is quit messy....no, it is a darn slaughter house. In fact, I know people are carefully looking for the bottom, but I'm going to believe those who say it is impossible to time a bottom.....no need to right now, there doesn't seem to be one.

I have friends at work who are close to retiring and lose more and more each day. It is quite sad because they feel "trapped" by the market.....they have lost too much to get out now.

But I tell them that there is always more to lose....to get out whenever it feels like too much and get back in on the rally up. It will happen at some point....even if it is perhaps 4 years out as I worry it might be.

But that's not the point of my post.....what I am wondering is, what next?

I mean, unless we have total uncertainty and wicked deflation, sitting on cash isn't a great idea....because inflation is a slow moving cancer to savings.

In deflationary times, Cash is King.....and in inflationary times, Cash is Trash.

So for me, that is the high order question.....which are we facing?

At the moment, commodity prices are falling....not just oil and energy, but food and other things too. This seems like a great thing....especially with uncertain jobs....but that signals deflation, and that isn't a fun time.

Our economy is based on the flow of money....and actually on debt itself. When deflation sets in, it is very bad to have debt....

So the falling commodity prices seem to be signaling this....but since the economy is so much in flux, who knows if this is a real sustainable situation, or just some sort of "ploy" of the economy to get us to spend. (you know, that invisible hand and all)

If we have inflation....it makes sense to put your money to work, or suffer the ever-eroding loss of value over time. It is a dance of sorts....and the uncertainty we have clearly leads me to think that liquidity is really the key.....being able to cash in, and cash out is much more valuable in such unstable times.

Short term: Who knows where things are going.....so I like the idea of keeping my assets liquid. This way, I can move in any direction I want fairly quickly.

Long Term: I hope to see a constant pattern opening up.....and move accordingly. It might mean investing in property....it might mean buying a small business. It might be equities... who knows. But being liquid until things stabilize is the key.

Income: The most important thing in this time of "waiting", make sure to have an income. This is the biggest reason for thinking of perhaps owning a business....or maybe even rental property. But again....that sort of thing makes for very non-liquid investments......none of these for me until we have stability.