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Safe haven investments in times of crisis

Safe Haven Investments

The last year has brought many new and serious challenges to the world economy: the crisis in the Eurozone, devaluation of the yuan, the collapse of the US markets and falling oil prices. In light of these events many investors have the question of where to invest their capital. According to analysts, "safe haven investment" in 2016 can be precious metals.

Gold, this metal is very sensitive to the policy of the Federal Reserve System, which plans to raise interest rates in the near future.

"The price could fall to $800 an ounce, but not for long. In long terms the gold will rise. There aren’t large amounts of it in nature. Its mining becomes increasingly difficult. At $1100 per ounce, many producers will begin to lose money on operations. And the demand from the population of India and China, which is 50% of the general demand for the gold, will grow right with the economy of these countries. So now is the best time for the gold purchase. This is not an ideal "safe haven investment", but it can survive anything. The gold is going to survive when all other safe haven investments will be washed away by storm” – say analysts.

The economy of China

With regard to investment in China's economy, experts advise to approach this issue carefully. "If you want to invest in the China stock market, it is better to choose an internal consumption sector, but that one, which is not associated with construction. The Chinese authorities have demonstrated their ability to provide a way for this market, which protects “blue coins” from falling prices. But as soon as the market becomes manipulated, it becomes incomprehensible and distorted, that’s why I would not advise to go into it". – says Head of the R&D department of Halyk Finance.

The U.S. Dollar

Many experts believe that the Dollar and the Eurodollar are always considered as "safe haven investments". "The U.S. Treasury bonds market is not the most peaceful place during the next year or two. In general, right now we are experiencing the phase of the cycle, when debt securities, particularly long, become very unpopular. The dollar will strengthen vs. the most liquid currencies along with the growth rates and expectations of rising rates from the Federal reserve system of the USA", - explain analysts.

Stocks, analysts also note that it is not necessary to forget about the securities market. First and foremost one need to pay attention to depreciating emerging market bonds, the profits on which are still higher than deposit rates. Those who make money from trading actively need to get accustomed to the commodity companies, which are now very volatile and are at their historical lows.

For those who are interested in technical industry, it is recommended to select the shares of such giants as Apple, Google, Microsoft, Alibaba, Tesla, Facebook or Twitter.

In general, experts believe that in the current global financial and economic instability it is extremely difficult to determine an absolutely reliable safe havens investments.

By Chieffinancing 25.07.2016

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