During the global market volatility induced by the conflict between Russia and Ukraine, investors fled riskier assets and sought "Safe Haven assets" (Safe Haven).

What is Safe Haven Assets?

A safe haven asset is an investment haven, it is any asset that an investor can profit from or put their investment on hold for a time when the market is volatile. The first thing that investors think about is gold, but besides gold being a safe asset. There are other safe assets as well.

4 Major Safe Assets

1. Government Bond

Government bonds are highly stable and reliable assets. It has low volatility compared to private companies and can definitely be converted into cash upon maturity. Government bonds offer a return in the form of interest, which is an advantage. However, it has downsides, including low interest rates and little liquidity.

2. Defensive Stock

Defense stocks are considered more stable than other companies on the market. Most of them are utilities stocks such as electricity, water, energy and necessity stocks. The advantage of defensive stocks is the opportunity to get returns. On the other hand, the downside is that the security is still relatively small compared to gold or government bonds.

3. Major Currencies

A stable country's currency is considered a safe haven as well, observing the factors of that country. For example, a stable government, a large and safe banking industry, and a positive trade balance.

4. Cash

Cash has to be considered the asset that is the simplest and most liquid to possess at any one time. However, the downside of cash is that it offers no return and may be subject to inflation. The advantage of cash is that it can be used to buy other assets immediately after the crisis passes.

Conclusion

In conclusion, although the above four assets are referred to as safe assets, their levels of safety vary based on the severity of the crisis in which you seek sanctuary. These four assets share the characteristic that "The return is minimal and may be zero," which is typical of low-risk investments. Investors should not anticipate large gains from safe investments; instead, they should consider it a way to preserve their cash. In the end, Safe Haven turns out to be a less thrilling investment under regular circumstances.

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