During a storm, we seek shelter. Things are no different with our investments – when there is a financial storm brewing, investors seek shelter in assets, what are commonly called: safe haven investing. Safe haven investments are investments that are expected to retain or increase its value during times of market turbulence. This article takes a look at some of the safe havens in each asset class.
Safe Haven Investing
Before we dive into the need for safe haven investing, a couple of things need to be stated. It is important to keep in mind that these safe haven investments are temporal: what is considered a safe haven at one time may not necessarily be true during a different time period. This is because each crisis is different; and the same investment may not qualify (although it might) as a safe haven during a financial crisis and then later during a war. What qualifies as a safe haven? In times of instability, the investments as stated earlier – need to retain value at the very least, if not increase in value. There are safe havens in each asset class although investors tend to flock to one or two during times of instability.