Are there safe-haven investments during wars?

[webfact]

file photo

 

by Michael Bridge

It is obviously a worrying time for everyone in Thailand with currencies crashing, and the prospect of peace diminishing as Russia drives through Ukraine.

Global stocks and equity futures tumbled last week while bonds and oil soared as Russian President Vladimir Putin’s decision to order a military attack on Ukraine cast a pall over global markets. 

So apart from hiding cash under the mattress, what are the sensible measures to take?

Well firstly look at the past as an indicator.

In occupied Europe during World War II, all things considered, gold was the best asset to hide in, preserve wealth, and maintain some liquidity. 

Thais as we know like to buy gold as many do not trust banks.

Stocks, land, real estate, and businesses worked only if you had a very long-term horizon. 

A review of market reactions during the major wars between 1926 and 2013 shows that the impact of war on stocks was perhaps strangely largely positive, rather than negative.

 

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World War II, the Korean War, Vietnam, and the first Gulf War were all periods in which "both large-cap and small-cap stocks outperformed" their long-run averages (although the final war on that list was extremely short compared with the others). 

Perhaps more surprisingly still, volatility did not take off (in other words, prices didn't seesaw dramatically) indeed, markets experienced lower volatility than normal.

Other safe havens

Safe havens are investments that typically retain value or even increase in value when other investments lose ground. Bonds are a classic example of a safe haven asset. 

High-quality bonds with a low risk of default continue to pay interest through good times and bad.
The safest assets are known as risk-free assets, such as sovereign debt instruments issued by governments of developed countries.

With sanctions being announced daily, perhaps having a cash emergency fund is sensible, and maybe work with a financial advisor to create a diversified portfolio.

Have adequate life insurance, through both work and/or private insurance, and make sure beneficiaries and wills are updated.

Meanwhile, an ounce of gold was trading at US$1,927 on March 4th, which was up by US$17.67 an ounce in a week.

The black market was of course the most lucrative profession during the war, but not sure if silk stockings and cigarettes will still be in demand in 2022!

 

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[ukrules]

Is the Baht taking yet? Get back to me when it's 45 Baht / USD.....

[FlorC]

In august 2020 when the gold price was 30.000 THB , Thai's were selling their gold. I thought stupid , and didn't sell. Gold fell back a lot of course.

Now gold is there again ( and more in sh-tty euro) , but I don't hear the Thais selling while I want to ....

I guess Thais are better at it than I and listen to them ?

Gold and defence company stocks ?

As soon as there is a stop of the conflict , gold will tumble again.

 

[BE88]

No, but all foods that can be stored for a long time are a good investment. ????

[BritManToo]

23 minutes ago, BE88 said:

No, but all foods that can be stored for a long time are a good investment. ????

Tinned & shelf stable foods are always a safe bet.

Store in plastic bins sealed with tape.

 

Come TEOTWAWKI they'll be worth more than gold .................

And if it doesn't happen you can still eat them.

Edited March 8, 2022 by BritManToo

[Lacessit]

Investments earn income. Gold is not an investment, it is a currency hedge. Any Russian who bought gold prior to the invasion of Ukraine is now sitting on huge profits.

A Swiss once observed to me Swiss francs are a good safe haven whenever there is a major crisis, as they always go up relative to other currencies.

I guess investing in companies who stand to profit from the sanctions imposed on Russia would be safe havens.

[Lacessit]

4 minutes ago, BritManToo said:

Tinned & shelf stable foods are always a safe bet.

Store in plastic bins sealed with tape.

 

Come TEOTWAWKI they'll be worth more than gold .................

And if it doesn't happen you can still eat them.

Watched "The Book of Eli" recently?

[edwinchester]

57 minutes ago, FlorC said:

In august 2020 when the gold price was 30.000 THB , Thai's were selling their gold. I thought stupid , and didn't sell. Gold fell back a lot of course.

Now gold is there again ( and more in sh-tty euro) , but I don't hear the Thais selling while I want to ....

I guess Thais are better at it than I and listen to them ?

Gold and defence company stocks ?

As soon as there is a stop of the conflict , gold will tumble again.

 

Couple of wifeys friends sold at 30k a couple of years ago, bought later when it dipped and are now selling again.

[mokwit]

28 minutes ago, Lacessit said:

A Swiss once observed to me Swiss francs are a good safe haven whenever there is a major crisis, as they always go up relative to other currencies.

Apart from when the Swiss National Bank devalues it.

[Lacessit]

9 minutes ago, mokwit said:

Apart from when the Swiss National Bank devalues it.

https://www.xe.com/currencycharts/?from=USD&to=CHF&view=10Y

 

[Henk Langeweg]

1 hour ago, BE88 said:

No, but all foods that can be stored for a long time are a good investment. ????

Or shares in food companies. You've always need to eat ..

[Tropposurfer]

Do what a lot of US senators do buy stocks in Lockheed Martin and McDonnell Douglas sure to make a 'killing' there.

[bangkokairportlink]

Maybe propaganda medias ? the ones that didn't even allow people to tell the truth of their ideas about covid and that now do exactly the same about Russia...

 

 

 

 

[BE88]

2 hours ago, Henk Langeweg said:

Or shares in food companies. You've always need to eat ..

Maybe but you need to know which company is the most reliable because but the stock card is not very appetizing ????

[Marvest]

The goal of a 'safe haven' investment is to protect against volatility.  A protective investment is an investment that maintains or increases value during the volatile period.  Traditional safe haven investments during war time are certain currencies (including some cryptocurrencies), precious metals, and equities that benefit from war such as military contractors and oil.  There are hedge funds that are set up for this specific purpose.  The ultimate (and perhaps riskiest) hedge is to short a volatile equity. Like with most investments, timing is a critical success factor.  Gains (or losses) are not realized until the investment is sold.  

[brianthainess]

Sadly, munitions or body bag companies. 

[KhunLA]

Same profits to be repeated with every regime change.  Arms & oil stocks.

 

Hmm ... almost like it was planned ... ????

[Knocker33]

Weapons manufacturers seems a safe bet.

 

Edited March 9, 2022 by Knocker33