Glossary Term

Safe Haven

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In investing, a safe haven is an asset that is considered to be a good long-term bet that is immune to general market volatility. It may not return as much as riskier, more volatile assets but can be relied upon to maintain its value even when other assets are losing theirs. An important feature of safe haven assets is that they tend to be uncorrelated or negatively correlated with other assets. This means they can keep their value in market downturns or even rise in value. Gold is considered the ultimate safe haven asset. It is scarce, expensive to mine and is negatively correlated with the US dollar. Other examples of safe haven assets include treasury bills, and cash in certain conditions, such as at the tops of speculative bubbles.

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