Three Safe Havens — And the One I’d Seek Out Now

by Andrew Zatlin October 24, 2023 3:00 pm ET

When people sense danger, they flee to safety.

And this is particularly true of investors.

The recent global turmoil has investors seeking safe havens.

Here’s where most of them are turning — and here’s where you should be turning.

For a transcript of this video, see below. This transcript has been lightly edited for length and clarity.

Three Safe Havens — And the One I’d Seek Out Now

It’s human nature to seek out safety, particularly when disaster strikes.

We certainly see that in the stock market. On October 8th, for example, after Hamas attacked Israel, markets responded with a flight to safety. Makes sense.

But I believe the conflict in the Middle East is just getting started. And that means the need to find safe havens will continue.

Today, I’ll show you where many investors are seeking safety — and where you should be seeking safety.

Flight to Safety

First, though, let’s look at what constitutes a safe-haven investment.

A safe haven is a place where investors go when they don’t want risk, a place where they can park their money and wait for danger or turmoil to pass.

Safe havens have a few criteria:

First, they need to be liquid. In other words, investors need to be able to quickly and easily get their funds out.

Second, the investment has to be in demand. And it must be somewhat limited in opportunity.

Finally, the investment can’t be in something that erodes in value over time. It has to have lasting growth.

Where do we find investments like these?

Your Safe-Haven Options

Let’s look at four options — three traditional ones and a wild card.

And let’s start with cryptocurrencies, the wild card of the bunch. Take a look at this chart:

This shows the price of bitcoin over the past two years. Note how volatile this asset has been — not exactly the poster child for stable, low-risk investing.

Some forward-thinking investors might flock to cryptos to get away from the stock market. But this is a small group. Most investors don’t perceive cryptos as a safe-haven investment. Not even global conflicts like the Russia-Ukraine war or events in Israel have pushed investors to scoop up bitcoin.

Bottom line: crypto isn’t a safe haven.

Are Bonds Safe?

So, how about bonds?

Here’s a 30-day chart of the yield on a 10-year bond:

When Hamas attacked, bond yields remained relatively stagnant. But when Israel took its time invading Gaza, yields moved back up.

This correlation is important. Remember, I’m expecting more conflict on the way. And if yields fall when there’s action, and yields are currently up, that means there’s plenty of downside potential ahead.

Now let’s look at the third option: the U.S. dollar against the Israeli shekel.

After the Hamas attack, the shekel lost a significant amount of value. And as the conflict continues, Israel’s economy will likely take a hit, potentially eroding the shekel’s value further.

Get ready to see investors move from the shekel to the U.S. dollar.

As for the final option…

This Option Takes the Gold

Take a look at gold prices:

When Hamas attacked, the value of gold surged to nearly its highest point in the past six months. Investors turned to this commodity as a safe haven.

In fact, the uptick in gold investment was greater than that in either U.S. dollars or bonds. Translation? Investors’ top safe-haven investment is gold.

It doesn’t happen often, but I’m on the side of the consensus. Gold is my choice for the ideal safe-haven investment.

If you’re a Moneyball Pro subscriber, I’ll show you the one gold-related investment I’d take advantage of right now…

This is an opportunity that could potentially triple your money by next year.

We’re in it to win it. Zatlin out.