What is a 'Safe Haven'

A safe haven is an investment that is expected to retain its value or even increase its value in times of market turbulence. Safe havens are sought after by investors to limit their exposure to losses in the event of market downturns. However, what are considered safe havens alter over time as market conditions change, and what appears to be a safe investment in one down market could be a disastrous investment in another down market.

BREAKING DOWN 'Safe Haven'

Fortuitously timed buy and sell decisions can make an investment appear to be a safe haven when it may not actually be one.

Gold is typically considered a safe haven when currency markets are volatile. United States Treasury Bills are also considered a safe haven even in a tumultuous economic climate because they are backed by the full faith and credit of the U.S. government. In the forex market, the Swiss franc is considered a safe haven currency. Finally, if an entire economic sector is performing poorly but one company within that sector is performing well, its stock could be considered a safe haven.

RELATED TERMS
  1. SAFE Investment Company (China)

    The SAFE Investment Company is the Hong Kong branch of the Chinese ...
  2. Safe Asset

    Assets which, in and of themselves, do not carry a high likelihood ...
  3. Tax Haven

    A country that offers foreign individuals and businesses little ...
  4. Mercantile Safe Burglary

    Insurance coverage for money, securities, and other assets that ...
  5. Safe Withdrawal Rate (SWR) Method

    A method to determine how much retirees can withdraw from their ...
  6. CHF

    In currencies, this is the abbreviation for the Swiss franc. ...
Related Articles
  1. Investing

    Second Quarter Hideouts

    Safe havens are a must in these volatile times. Investors who want protection need to find safe sectors. Automakers and retailers fit that bill.
  2. Trading

    Is The Swiss Franc A Safe Haven?

    We examine when and why there are runs on Swiss francs.
  3. Investing

    How Safe Are Gold And Silver Investments?

    Contrary to both tradition and popular opinion, gold and silver may not be the best hedges against inflation nor the safest of havens.
  4. Managing Wealth

    Choosing An In-Home Safe: Features To Look For

    What to look for in a box to protect your irreplaceable belongings.
  5. Taxes

    All You Need to Know About Tax Havens

    These tax-free zones might sound appealing, but the consequences often aren't.
  6. Investing

    Are U.S. Treasuries Still Riskless?

    Many investors are now asking if treasuries have become a risk asset as negative rates sweep the globe.
  7. Investing

    Is Your Investment Strategy Going Extinct?

    Investors need to be aware that time moves on and often leaves trendy investing techniques in the dustbin.
  8. Taxes

    Tax Haven Vs. Tax Shelters: Is There a Difference?

    Learn about the difference between tax havens and tax shelters, and how both are used to reduce tax liability or avoid paying taxes altogether.
  9. Taxes

    Switzerland's Declining Tax Haven Appeal

    Switzerland's tax haven allure is being threatened by efforts by the US and other governments to make Swiss banks give up their much-vaunted secrecy.
  10. Investing

    The Pros And Cons Of Money Market Funds

    The pros to investing in the money market include the chance to park money in a safe haven during volatile times.
RELATED FAQS
  1. Is Cyprus considered a tax haven?

    Explore the factors that resulted in Cyprus abandoning its status as a tax haven, including the terms for the bailout of ... Read Answer >>
  2. Why is the Cayman Islands considered a tax haven?

    Find out why the Cayman Islands is considered a tax haven and why this location is so popular among those looking to reduce ... Read Answer >>
  3. Why is Andorra considered a tax haven?

    Find out why Andorra is considered a tax haven and how developments have lessened its appeal due to increased taxation and ... Read Answer >>
  4. Why is Luxembourg considered a tax haven?

    Learn about Luxemburg's role as a tax haven for large corporations around the world. Discover how the country's tax laws ... Read Answer >>
Hot Definitions
  1. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  2. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  3. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  4. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  5. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  6. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
Trading Center