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As the uncertainty of the Iran war looms, investors are looking for a safe haven for their money. Amid the uncertain duration and outcome of the war, investors are also concerned about the price of oil and supply chain disruptions.
With memories of similar turmoil during the COVID-19 pandemic in the not-too-distant past, the so-called “flight to safety” assets are once again surging, pulling money away from riskier investments like stocks.
According to experts, here are the five safest places where you can park your money during times of war.
1. Gold
When it comes to safe-haven assets, gold often tops the list. This is because gold has intrinsic value. It is not dependent on any government, currency or economic productivity to make it shine.
Gold is “an effective portfolio diversifier that can help hedge against many types of market and economic risks.” UBS analysts wrote In the recent investment outlook, given that demand for the metal increases as global tensions increase.
Ray Dalio, founder of Bridgewater Associates, has also encouraged investors to hold gold as a portfolio stabilizer. He said, “If you don’t have gold, you know neither history nor economics.”
2. US Treasury Securities
US Treasury securities often attract investors’ funds during geopolitical turmoil because they are backed by the full faith and credit of the US government. according to Securities and Exchange CommissionThese are generally considered to be one of the safest investments in the world.
This reputation makes government bonds a frequent target for investors seeking stability during geopolitical shocks.
3. High Yield Savings or Money Market Accounts
Many investors sold their stocks and bonds during the war and kept only cash. Most of that money goes into FDIC-insured high-yield savings or money market accounts. This allows the funds to continue earning interest, usually at a nominal rate, while offering stability and immediate access.
4. US Dollar
The US is still seen as a haven in times of turmoil, and this also attracts investors to its currency.
As Reported by Barron’s“The US dollar remains a safe haven for investors,” David Morrison, senior markets analyst at Trade Nation, wrote recently.
5. Defensive Stock
Some stocks are considered more defensive than others, and they typically attract investors’ dollars during uncertain times. You still have to pay your electric bill, go to work, and eat food no matter what’s happening in the economy, so companies that provide these goods and services tend to perform better than more discretionary businesses.
“Even during recessions, consumers typically cut back on other spending before they stop paying their utility bills,” According to Charles Schwab.
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This article is for informational purposes only and does not constitute financial advice. Investing involves risk, including possible loss of principal. Always consider your individual circumstances and consult a qualified financial advisor before making investment decisions.