Russia’s invasion of Ukraine sent shockwaves through investment markets. Stocks, oil, crypto, and every other investment category are seeing sharp changes in price. Armed conflict, sanctions imposed on Russia and the rising possibility of nuclear fallout all create price volatility and uncertainty in the markets. Many fund managers and investors are moving their funds from what are perceived as risky investments to more reliable ones, turning to safe-haven investment options like the US dollar and gold. Something similar played out in the first few months of the COVID pandemic in 2020, with gold and the US dollar skyrocketing to their highest prices on record.
Safe-havens are investments that maintain or increase in real value or outperform financial markets in times of market uncertainty. Investors seek these out to maintain and, in some cases increase, the value of their investment portfolios in market downturns. The current state of the world (Russia invading Ukraine, the world experiencing higher inflation, and global supply chain stress) points to the opportunity for safe-haven investments to help preserve your hard-earned wealth. The US dollar performs well as it is a reserve trading currency, but no other safe-haven has the tried and tested performance to that of gold. To this day, gold has held the throne and proven itself as the world’s number one safe-haven asset.
Article courtesy of businesstech.co.za
