In an analysis done by Reuters, it said the deflation threat in the economy of the Euro Zone might reverse the continuous inflow of major investments for 2013. The news agency als said on its article that the economic threat could draw out funds from stocks and could be poured into government bonds and cash.

Inflation in the Euro Zone was said to have slowed 0.7% in October. This, the article pointed out, was far below the European Central Bank's (ECB) 2% target. As a result, ECB cut interest rates to a new low of 0.25%.

2013 saw some industry observers, particularly in Wall Street, dubbing this year as the "Great Rotation." The event is the financial activity wherein funds that should have been earmarked for bond funds and exchange-traded funds are now invested in equities. According to Businessweek, US bond funds saw investors redeeming USD30.30 billion from the beginning of August till the 19th, which was the third-highest on record as reported by TrimTabs Investment Research.

"These outflows mark an enormous shift for the bond world. A vicious circle of losses and redemptions as the bond binge unwinds could get nasty," TrimTabs said.

Analysts said this financial event could trigger a response from investors as they would avoid ultra risks.

JPMorgan's head of asset allocation Jan Loeys said, "Deflation would follow from lower growth than we currently have. It would increase the attraction of fixed income versus equities."

Bank of America-Merrill Lynch, which Reuters said had coined the phrase, said investors investors got atracted to global equity funds, and as a result, saw USD231 billion in inflows this year. Funds for bonds also saw an increase to USD16 billion, and reportedly posted 12 outflow records in 14 weeks.

UBS Wealth Management chief UK investment strategist Bill O'Neill said, "If we get a deflation psychology beginning to break out in Europe you have to reconsider the relationship between a 'risk' asset and 'non-risk' asset. Markets will be focusing on assets that provide nominal guaranteed returns such as government bonds. You would want to be aware of risks in equities, in particular in financials."