Another possibility is rapid inflation. Today's latest CPI is 1.4 percent. Suggestions for investments during period of inflation include real estate, inflation-indexed Treasury bonds, and gold. You can buy these assets through mutual funds as well. The third scenario is deflation.
Prices go down, sounds great.
The problem lies in the psychology of the value of money. If Consumers think that prices will keep falling, they wait for better prices. The result is a slowing economy. Competition makes it more difficult for businesses to borrow and this adds to weakened stock prices. This is also a time when real assets such as real estate and gold lose value and prices drop.