Introduction
A safe haven is an investment that either stays constant or increases during the times of market turbulence. It is chosen to limit the losses during market downfalls.
Understanding Safe Haven
The evaluation of safe haven investments varies with different markets. Before investing, investors must perform ample due diligence. Mostly, investors look to buy safe haven assets that are uncorrelated to the general market, such as precious metals, currencies, and stocks from particular sectors.
Gold is a physical commodity that has maintained its value over time, and its value is not based on any interest rate as impacted by any government policies. In the case of inflation, the value of gold increases since it is priced in USD. Therefore, investors tend to convert their savings to the form of gold, which increases the price with increased demand. Other commodities are silver, copper, sugar, corn, livestock, treasury bills, defensive stocks, and cash.
