And so, waking up one morning, all we hear about is safe haven assets. Asylum assets here, asylum assets there. This term is now walking all over the Internet, and people are still wondering what asylum assets are and how they can help protect a portfolio.
Let’s see. Asylum asset is an asset that does not lose its value during periods of stress or uncertainty in the market. Moreover, some of them can be very beneficial in these conditions.
“I know, now tell me about your little sparkling friend,” you say. But believe me, Mr Gold is not the only one who can protect you and certainly not the one you need if you want to make a profit.
1 – Currencies
Do you follow the Korean crisis? If a rocket flies over you, will your stocks and currency go up or down? Try to guess. Obviously down. However, this is not what happened to the Japanese yen last week. Instead, the Japanese currency rose in price, because it occupies an important niche in the safe haven asset category. If the yen is capable of lifting when I fly missiles over Japan, I think it speaks enough about its reliability in any situation.
Another currency that shows itself well in times of total confusion is the Swiss franc. Reputation is, or something else, but what hails from Switzerland radiates confidence. And currency is no exception.
2 – Banking Shares
In a world where cash incentives and low interest rates rule the ball, bank stocks seem like a good alternative for those who want to keep money in their accounts. For this reason, owning bank stocks can be a profitable opportunity, as investors become more and more conservative about the location of their capital.
3 – Earth
Few things are as good as buying your own home. And nothing compares to the feeling of owning three or four. Land and real estate is a great way to preserve your capital when difficult times come. However, you should always watch out for bubbles to avoid too expensive alternatives.
4 – Luxury Items
By analogy with the purchase of land, luxury items such as diamonds, expensive watches or collectible items are a blessing when it comes to financial crises. Why? People know that products of this category lose in price less than cheap products, making them attractive for investment. And collectibles can even add value over time.