Are there any safe havens?

It was a classic:  Somewhere in the world, a war broke out – and investors fled to safe havens. Gold rose, as did the US dollar, and US government bonds with long duration were also popular. However, this typical pattern of behaviour has now disappeared or can only be seen to a limited extent. The reactions differ depending on what is seen as a crisis. For example, this can be seen with cryptocurrencies: For a long time, they were regarded as the indicator of the markets’ appetite for risk, so they should not be in demand at present – instead, they rise sharply. „However, this is very short-sighted“, says Gerlinger, because “cryptocurrencies are a ‘would-be currency’ without any intrinsic value.”

For example, AAA government bonds worked very well as a safe haven during the banking and the euro crisis. They were sought after with corresponding price increases. At the outbreak of the Ukraine war, they were also still popular as a way out, but they are proving to be rather weak during the Gaza war, so they are not performing well. In contrast to this, Gold played the role of a safe haven in both conflicts. During the extremely low interest rate phase, real estate was also used as a „crisis-resistant“ investment, which led to an enormous inflation in prices.

„The psychology of the markets and market participants is playing an increasingly important role here“, says Gerlinger. „If, for example, the fear of oil price-driven inflation plays a greater role, as in the Gaza conflict, this leads to distortions.“ In addition, the global financial markets have become increasingly diverse. „The safe havens defined to date are primarily an experience of the Western and Anglo-Saxon financial markets“, says Gerlinger.

With new, important players comes a new perspective on the markets. „Chinese investors, Latin American investors, sovereign wealth funds from the Emirates – they are all playing an increasingly important role“, according to Gerlinger. „They redefine both risk and security.“ After all, why should an investor from outside the dollar zone take a currency risk in the own portfolio while looking for security? Instead of US investments, safe havens are therefore increasingly being sought in other regions. And they are also found there. „Even if the USA or the global West still dominate the financial markets by far“, says Gerlinger, „the gaps have become smaller and the opportunities for alternatives become greater.“

„Nevertheless, there is of course a certain power in large numbers. For this reason, the US market will remain the first choice in times of crisis simply because of its market capitalization. The same holds, to a lesser extent, for markets of other industrialized nations“, says Gerlinger. „The only investment that can still keep up here is also one of the oldest and certainly the most global: Gold.“

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