3 Investments To Consider Avoiding In 2016

With just two weeks to go until markets ring in 2016, traders have begun to place their bets on the sectors, companies and trends that will make it big in the coming year. There has been a lot of buzz surrounding blue chips like General Electric GE and Walt Disney Co DIS; and despite jitters about the Fed's rate hike, most believe there are several opportunities to be had. However, there are other investments out there that analysts are cautioning investors to stay away from.

Bonds

The bond market has been tumultuous at best in recent months as investors prepared for the Federal Reserve's rate hike. Bond investments represent a good way for investors to earn a safer, fixed income and therefore have been appealing to those who are more cautious. However, many analysts say that even investors looking to stay on the safe side would see better profit in the equities market next year, and that they'd be better off putting their money into a secure dividend stock than a bond fund. Ben Willis from Whitchurch Securities said he advises traders to forgo the bond market in 2016 as the two factors that impact their prices most, interest rates and inflation, are likely to remain near zero in the coming year. Chevron Corporation CVX Investing in oil for 2016 remains a hotly debated subject as the commodity is likely to continue struggling with oversupply issues. However, with that being said, many believe that oil prices have already hit their bottom and that now is the time to get in for a bargain. Whether or not you see the oil market recovering in 2016, it may be difficult to find an energy firm worth investing in. Chevron's share price has lost nearly 20 percent over the past year, and many see it continuing to tumble in the year to come. The company is planning to continue with asset sales to help cover cash flow shortages and the firm's balance sheet has begun to look shaky. While the company isn't likely to go under any time soon, many see the firm failing to raise dividends in 2016 and worry about the firm's ability to continue weathering the storm. Philip Morris International PM With marijuana growing in popularity across the US, many investors are looking out for the "Philip Morris" of pot in order to invest. Unfortunately, the tobacco retailer itself appears to be losing its luster as smoking goes quickly out of fashion. Health concerns have caused the company to lose out on customers and more regulations and higher taxes have squeezed the firm's profits. The company has been able to lure investors in with a hefty 4.5 percent dividend, but many believe that the firm's core business is under serious threat and wonder where the company's future lies.