Stocks or bonds? Right now, maybe neither.

When both stocks and bonds are unappealing, why buy?

Bebeto Matthews/AP/File
Christopher Carella, a trader with Kellog Capital Markets, looks at a trading monitor from the floor of the New York Stock Exchange in New York in this file photo from Aug. 6.

Missing in the big Stocks versus Bonds debate that's raging right now is the fact that there is always a middle ground. For investors, the stocks versus bonds question is almost never binary, rather it is a question of degrees - what percentage stocks, what percentage bonds?

So here's my middle of the road compromise - both stocks AND bonds are pretty unattractive right now. Unless of course you compare them to real estate, in which case they shine like the top of the Chrysler Building :) .

Many investors are sitting on a lot of cash right now for just this reason. They aren't turned on by a bond market that has already run and offers very little other than interest rate risk at this juncture. They are also unimpressed with the growth outlook for US equities.

So while cash is trash and we are earning nothing on it, in these disinflationary times, who really cares?

There are as many reasons to abhor stocks as there are to dislike bonds. One asset class hasn't been able to get out of its own way in a decade, the other is like a runaway freight train with investors willing to earn nothing just to be able to claim perceived safety.

Overall, two equally unattractive markets, but for very different reasons. Let's end the stocks versus bonds debate and just agree that we don't much love either of them at this moment.

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