Safe Haven

AAA

DEFINITION of 'Safe Haven'

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.

INVESTOPEDIA EXPLAINS '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. Contra Market

    A move against the direction or trend of the broad market. Contra ...
  2. Gold/Silver Ratio

    A ratio (X:1), demonstrating how many ounces of silver (X) it ...
  3. Volatility

    1. A statistical measure of the dispersion of returns for a given ...
  4. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with ...
  5. Tax Haven

    A country that offers foreign individuals and businesses little ...
  6. Swissie

    A slang term for the Swiss franc. The Swiss franc, or Swissie, ...
Related Articles
  1. A Look At National Debt And Government ...
    Bonds & Fixed Income

    A Look At National Debt And Government ...

  2. The History Of The T-Bill Auction
    Bonds & Fixed Income

    The History Of The T-Bill Auction

  3. The Swiss Franc: What Every Forex Trader ...
    Forex Education

    The Swiss Franc: What Every Forex Trader ...

  4. Diamonds: The Missing Commodity Derivative ...
    Active Trading

    Diamonds: The Missing Commodity Derivative ...

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center