Investing Research Articles

…gold is generally a hedge and safe haven for stocks in developed markets, but not in emerging markets.

Are other precious metals more effective than gold as safe havens from turmoil in stock and bond markets? In their September 2013 paper entitled “Time Variation in Precious Metal Safe Haven Status — Evidence from the USA”, Brian Lucey and Sile Li compare and contrast the effectiveness of four precious metals (gold, silver, platinum and… Keep Reading

How should investors evaluate the effectiveness of a safe haven asset? In their July 2020 paper entitled “A Safe Haven Index”, Dirk Baur and Thomas Dimpfl devise and apply a safe haven index (SHI) to evaluate over 20 individual potential safe haven assets. SHI consists of seven equal-weighted assets: gold, Swiss franc, Japanese yen, 2-year,… Keep Reading

Are precious metals effective safe havens, preserving capital when stocks and bonds crash? In their January 2017 paper entitled “Reassessing the Role of Precious Metals as Safe Havens – What Colour is Your Haven and Why?”, Sile Li and Brian Lucey assess whether four precious metals (gold, silver, platinum and palladium) are safe havens relative to stock market… Keep Reading

Does a dual momentum selection/weighting approach applied to the U.S. Treasuries term structure identify a safe haven superior to any one duration? In his February 2015 paper entitled “The Search for Crisis Alpha: Weathering the Storm Using Relative Momentum”, Nathan Faber tests a dual momentum safe haven based on U.S. Treasuries of different durations as proxied by… Keep Reading

A subscriber asked which exchange-traded fund (ETF) asset class proxies make the best safe havens for the U.S. stock market as proxied by the S&P 500 Index. To investigate, we test 15 ETFs/funds as potential safe havens: Utilities Select Sector SPDR Fund (XLU) iShares 20+ Year Treasury Bond (TLT) iShares 7-10 Year Treasury Bond (IEF)… Keep Reading

Has increasing use of gold as a portfolio diversifier changed the response of its price to crises? In their August 2012 paper entitled “The Destruction of a Safe Haven Asset?”, Dirk Baur and Kristoffer Glover examine the potential of investor behavior to extinguish the safe haven property of gold. Specifically, they consider how widespread inclusion of… Keep Reading

How effectively and consistently do equities, bonds, oil, gold and the dollar serve as hedges and safe havens for each other? In their September 2010 paper entitled “Hedges and Safe Havens – An Examination of Stocks, Bonds, Oil, Gold and the Dollar”, Cetin Ciner, Constantin Gurdgiev and Brian Lucey investigate pairwise hedging and safe haven… Keep Reading

How does the effectiveness of safe havens vary over time? In the February 2012 draft of their paper entitled “Safe Haven Assets and Investor Behaviour under Uncertainty”, Dirk Baur and Thomas McDermott examine the roles of gold and U.S. Treasury instruments as safe haven assets during times of financial markets uncertainty. They define a safe haven asset as… Keep Reading

A subscriber asked whether the U.S. dollar is a safe haven from the U.S. stock market. One way to address the question is to repeat the tests used in “Best Safe Haven ETF?” on Invesco DB US Dollar Index Bullish Fund (UUP). Specifically, we look at: Contemporaneous UUP return correlation with the S&P 500 Index… Keep Reading