Even safe security assets may no longer be as safe

The turbulence engulfing the world’s stock markets in recent days have prompted certain investors to seek “security” assets which generally maintain their value during periods of market turbulence.

Here are some of the main assets with safety holly and how they prove “in complete safety” in market disorders.

1. Gold

Gold prices have reached record heights above the $ 3,000 threshold for the first time last month, because fears of an economic slowdown, pricing uncertainty and purchases by central banks aroused demand.

The metal struck nearly $ 3,150 at the end of March, but has since withdrew just over $ 3,000.

John Reade, the main market strategist at the World Gold Council, told Business Insider that the Gold rally this year was proof of its lasting status as a security ratio and that the recent decrees had not changed this.

Analysts from the Bank of America, led by Michael Widmer, said that in a note on Sunday they had maintained a price target of $ 3,500 for gold.

“All of President Trump’s economic policies are not entirely compatible and the increase in the uncertainty of policies has been accompanied by an increase in gold prices,” they said. “The United States becoming more and more interior, there is also a risk that the dedensation will continue, which should help the yellow metal.”

2. Currencies

Certain currencies, including the US dollar, are generally considered as security shelters in troubled times. However, some investors are looking for alternatives to the greenback after diving after Trump’s pricing announcements.

The non-influence of the dollar means that his status can be threatened, wrote George Saravelos from Deutsche Bank in a recent note.

The factors include the deficit of the US current account rape the 4% threshold in recent months and the decline in the correlation between the dollar and risk assets.

UBS analysts said on Tuesday that the Dollar index fell by around 1% in April despite the volatility of the market.

“In the medium term, we believe that a period of more sustained weakness for the US dollar is likely if the Fed reduces faster interest rates than expected in response to the weakness of American economic growth. In addition, we believe that uncertainty can lead certain market players to diversify long -term and profitable asset exhibitions.”

Investors often turn to the Japanese Yen and the Swiss franc, who both joined this month.

“The yen is considered to be an asset of refuge because Japan is one of the largest creditors in the world,” said Bi Jason Delorenzo, owner and director of investment advisor Ad Deum Funds. “When there are global troubles, the Japanese will repatriate to the yen, and he appreciates.”

3. Treasurys

Treasurys are obligations issued by the United States government. They are considered one of the safest investments available “because they reliably pay an interest rate considered to be without risk,” said Delorenzo.

David Weild, the former Vice-President of the NASDAQ, told BI that economic disorders reduce the value of most of the asset classes, with the exception of the obligations issued by solid nations such as the United States.

“If you looked at what happened after 2008, the only thing that joined this case was the treasure,” he said.

Some even had a negative return or an interest rate. “It was a sign that everyone thought that the banking system was insolvent and that they had to keep their money somewhere where they could recover it – and that bought T tickets,” said Wield.

Davide Accumazzo, an instructor of finance at the Graziadio Business School of the University of Pepperdine, said that “safe investments in prudence” in volatile times were traditionally very up, but this may not be the case for any longer.

“The proposed whole of new policies could harm the economy and generate inflation also, a most unhappy result,” he said. “Obligations are well done in economic slowdowns, but rather bad during inflationary times.”

On Wednesday, the Treasury markets knew what Deutsche Bank analysts qualified an “incredibly aggressive sale” which added “to the proof that they lose their traditional status by refuge”.

The performance on 30 -year bonds again reached 4.96% after the fastest increase since March 2020 in the last two negotiation sessions. The return over 10 years has struck

“There is not yet a sign that the market manages to find a background successfully, and it seems that no asset class has been spared while investors continue prices in an increasing probability of an American recession,” Deutsche analysts wrote.

4. Defensive stocks

Defensive actions are companies that generally have stable performances, whatever the economic situation, because they sell goods or provide services that consumers will continue to buy.

Costco is an example. The retailer stock has dropped in the last five days at the end of Tuesday, but only 4% and is almost stable for the year. The stock is better than Walmart, which is down 7.3% in the last five days and almost 10% this year, while the total Amazon drop by 9% and 22% respectively.

5. Cash

Finally and above all, there is money – and even it has drawbacks.

“Money is considered a safe refuge because if you have money that is not invested, it cannot lose,” said Delorenzo. “However, if the assets increase in value, your species does not do so, and this implicitly submits your money to lose value. In addition, inflation harms in cash assets.”

For Accumazzo, Cash offers a respectable and without volatility return, but he also likes obligations.

“Despite their negative correlation with inflation, obligations could be the best option on an intermediate horizon given the current good yields and a main assessment shot if the rates end up decreasing,” he said.