Safe-haven assets 2022: what they are and what to invest in in times of crisis

A safe haven asset is considered an investment that manages to maintain its value in times of crisis. In some respects, some of these assets tend to increase in value at a time of market uncertainty.

Today, with inflation at 9.1% at European level, caused by the energy crisis, with the NASDAQ losing more than -30% and the S&P 500 which marked -50%, talking about safe-haven assets is a must. .

In fact, if you have open positions and want to protect yourself from inflation , they can be a way to protect your portfolio and still get you an income . To do this, you will have to choose the ones that best suit your investment strategy, evaluating their characteristics. You will find all the information about it in our analysis.

List of shelter assets 2022

Typology	Specific
1) Precious metals	Gold, silver, platinum, palladium
2) Values	Dollar, Japanese Yen, Swiss Franc
3) Precious stones	Diamonds and jewels
4) Luxury goods	Watches, art, coins, collectibles
5) Real estate	Real estate, crowdfunding
6) Collectibles	Toys, stamps, unique items
7) New safe-haven assets	Wine, cryptocurrencies, NFT

Known in English as a safe haven asset , safe haven assets are financial instruments that behave differently than the normal market trend. In fact, they tend to maintain their intrinsic value even if there is high volatility and uncertainty.

In the common imagination, the main safe haven asset is gold, a real product on which investors shift their interest in the moment in which the phases of financial crisis are experienced. This example is just one of several assets that are encompassed under this term.

Talking about safe- haven assets in 2022 means considering a set of financial instruments, including new generation ones, which can be a safe haven for your money. For this it is useful to evaluate a series of characteristics that unite them.

Because safe-haven assets acquire value over time

Some assets are better suited to counter volatility and periods of inflation , such as gold, diamonds and the dollar. Others can be very valuable when there is uncertainty in the market: the example is real estate. Furthermore, there are innovative tools, such as cryptocurrencies, NFTs and wine , which have opened up new investment opportunities. Finally, there are items such as collector coins, stamps and watches that constantly increase their value over the long term.

Almost all of them are tangible assets , that is concrete, a concept that can also be applied to the digital world of cryptocurrencies. In addition, they are products that you can immediately turn into cash .

To this you must add that they are assets that do not tend to deteriorate , on the contrary they acquire a greater value over time. Finally, their growth is closely linked to a high supply / demand ratio . This means that there are more purchase requests than the number of products sold.

Not all safe haven assets have the indicated characteristics. For this it becomes essential to inform yourself and know every facet of them. We specified that the information included in this article is not financial advice, but analyzes carried out on the basis of the data and the trend over the years of these assets. If you want to invest safely, we recommend that you rely on an expert advisor.

Characteristics of safe-haven assets	Specific
Real assets	They have a well-defined physical shape
Liquid assets	They can be converted into cash easily
They are limited	The supply of the asset almost never exceeds the demand
Highly in demand	They are tools that are required in every age
Stay	They do not deteriorate over time

1) Safe-haven assets 2022: precious metals

The term precious metals groups within it a series of rare minerals that have a high intrinsic economic value.

Here are the main ones:

air;
silver;
palladio;
platinum.

You can invest in these safe haven assets by physically buying the asset , and holding it at your home, or in special vaults provided by sites such as the BullionVault platform . In addition, you will have the opportunity to invest in the futures of individual precious metals by opening a buy or sell position, by registering with one of the best online broker platforms . Let's evaluate what are the characteristics of the individual precious metals that make them safe haven assets.

Race for safe-haven goods: Gold

The current energy crisis with the rising gas price is considered as one of the main causes of market instability and rising inflation. However, the beginning of the change in the economic trend, for some analysts, is linked to the phase of the pandemic. This is demonstrated by the behavior of gold . At the beginning of 2020, in full emergency from Covid-19, the price of gold increased, marking an increase of 30% .

A higher yield than the sub-prime mortgage crisis of 2008, in which the price of the precious metal had acquired + 24%. Today, after hitting $ 2,072, the trend is stable, fluctuating in a range between € 1,700 and € 2,000 . .

Investing in safe haven assets: Silver

Year	Event	Trend of the metal
2001	Collapse of the Twin Towers	+47%
2008/09	Subprime mortgage bubble	+120%
2012	Sovereign Funds Crisis	Stable price
2020	Covid-19	+35%
2022	War Russia / Ukraine	+17%

For some analysts, the silver future is a sign of uncertainty in the market. In fact, in the last 20 years, the growth of the price has been concomitant with geopolitical and economic events.

Without going too far back in time, during the pandemic phase the value of silver reached the price of € 30 per ounce , and then contracted by 21%, during the initial phases of the war between Russia and Ukraine, and recovered. a + 12.5% in recent months.

A figure that shows how investors, in moments of uncertainty, tend to shift their investments to this precious metal, determining its growth at a given historical moment.

Platinum and palladium

Among the main characteristics of a safe haven asset is the limited availability of the product which determines a high supply / demand ratio.

The typical example is that of two metals such as:

platinum;
palladio.

Both are goods that provide for reduced production, given the scarcity of deposits present worldwide. On the other hand, they are elements in great demand , used in various fields, from industrial to luxury, up to the technological sector. With the war in Eastern Europe, the price of palladium was the protagonist among the safe-haven assets .

In fact, the price in March 2022 doubled the value , starting from € 1,700 and reaching € 3,400. Today its price has stabilized around € 2,204. The reason is closely related to the sanctions against Russia, given that 14% of palladium production comes from this country.

2) Investing in currencies as a safe haven

In times of crisis and high volatility, current currencies are among the assets most used as safe haven assets by medium and large investors .

The stock market has suffered the condition of uncertainty going to collect negative quarterly - see the case of the group of technology shares FAAMG, or Meta of Facebook , Amazon , Apple , Microsoft and Google , which have lost an average of 32% of their value compared to the two-year pandemic.

Instead, currency yields continue to be high. Based on the ranking drawn up each year by Morgan Stanley , here are the currencies considered as safe haven assets:

dollar;
yen giapponese;
Swiss franc.

Today, with the exponential increase in inflation, the price of the dollar is on a par with that of the euro. Furthermore, the US currency continues to be the world's reserve currency and the primary instrument for international trade agreements. It is also the currency used to determine the prices of other safe-haven assets, such as gold.

In addition to the dollar, you can also consider investing in the Japanese yen . Thanks to the interventionist policy of the government and the Bank of Japan, in recent years the value has remained constant even against major currencies such as the dollar and the euro. This currency often strengthens especially when US markets are affected by recession and inflation.

To close the investment opportunities in currencies in times of crisis, you can consider the Swiss franc . To make it resistant to the economic events of recent months, there is first and foremost the independence of Switzerland from the economic system of the European Union.

This country is part of the tax havens , offering advantages from the point of view of taxation and interest rates applied to banks. This is why the increase of 0.75 percentage points by the ECB and the American Fed will not affect the country's domestic economy.

3) Example of safe haven assets: diamonds and jewels

A safe haven asset is durable and does not deteriorate over time. Furthermore, its price tends to grow with a constant return, as well as not being influenced by the trend of inflation.

All characteristics that reflect the price of diamonds . In fact, in the last 10 years their growth has been equal to an average of 4%. In particular, during the last year, there has been an overall increase in all sectors of 12%, from sales to extraction.

Below we analyze what are the other characteristics that allow them to keep their price constant or to make it grow during the phases of the market:

liquid asset: you will be able to turn diamonds into money thanks to a transparent quotation and a market that provides for a high demand;
easily transportable: these are products that you can easily transfer and transport to any country, since there are no particular restrictions;
it does not suffer from inflation: the price of diamonds is off the stock exchange and as such does not suffer from market trends and crisis phases;
limited production: the quantity of precious stones tends to decrease over time due to the closure of the mines or the need to search for diamonds more in depth.

4) How to invest in times of crisis: luxury goods and collectibles

Watches, works of art, luxury cars and numismatics are sectors that tend not to be affected by the economic and financial crises. Indeed, with the passage of time, their value tends to rise. For watches, the example is that of Rolex , an icon of the time sector.

The company was born in 1905 with the idea of creating a version of a watch that combined sportiness and elegance. Depending on the type of model, the price of a Rolex ranges from € 2,500 up to € 24,000 for the most unique examples. Obviously, you will have to be careful of scams and above all to avoid damage to the watch that can affect its value.

In recent months, the luxury sector has experienced a 21% drop in sales. However, there is a sector that goes against the trend, namely that of works of art . In the first six months, in the midst of the financial and energy crisis, sales grew by 25%, with a turnover of 26 billion per hour and an increase of approximately 7.6 billion compared to 2021.

In particular, the sectors that have obtained the greatest increase are:

modern and contemporary art;
design;
old and 19th century paintings;
numismatics.

Finally, the luxury car sector is also attracting the interest of many investors. For example, Ferrari (RACE) share prices have grown by 430% over the past 5 years. Furthermore, the news of a possible IPO of another historic brand, the Porsche company , is now confirmed .

5) Safe haven where to put money: real estate and crowdfunding

According to the report on the 2022 Real Estate Market , the growth that took place in 2021 will also be reflected throughout this year, with over 700,000 transactions for the purchase and sale of real estate. The total investment is around 6.1 billion .

The sector is driven by transactions on offices with 2.2 billion and an incidence of 37%, followed by commercial real estate for 1.8 billion and the living and hospitality sector , with 0.7 billion.

An increase of 133%, with 0.4 billion invested, was also acquired by the world of real estate crowdfunding , thanks to a growth in specialized platforms. A system that allows you to invest small capital on the real estate market and to obtain variable returns, even in times of crisis.

However, you must consider that the increase in the inflation rate significantly affects the consumer's purchasing power. For some analysts, 2023 will be a time of consolidation for the sector.

6) Safe-haven assets that do not lose value

Unique and antique toys, stamps and design objects are interesting sectors during times of crisis. In fact, they are incorporated among those products that tend to increase in value over time and are therefore defined as safe-haven assets. The reasons are different. Firstly, they are not traded on the markets and therefore are not affected by their performance.

To this you must add that prices are established on the basis of the supply and demand ratio , with their increase over time, since it is a sector that you can define as a niche . This involves an interest linked to a small group of collectors or lovers. While this offers you ample opportunity to see the value of a toy and stamps grow over time, it also makes them products that are not easily monetized.

7) New safe-haven assets

The term new safe-haven assets refers to the complex of assets and products which, in the last 5-10 years, have proved to be a valid investment opportunity.

The characteristics are similar to those of traditional safe-haven assets, since they tend to keep the price stable over time and in some cases to grow.

Here are the most interesting ones:

cryptocurrencies;
fine wine;
NFT.

Cryptocurrencies

The collapse of cryptocurrencies in recent months has cast doubt on the hypothesis of considering Bitcoin and some digital currencies as a form of safe haven for 2022. Just consider that their capitalization, equal to 2.8 trillion dollars in 2021, suffered a drastic reduction, losing 70% and reaching 935 billion in July 2022.

However, reality shows that some digital assets are still considered valid by investors to protect money from inflation. In fact, even if Bitcoins are experiencing one of the most critical phases in their history, with the price going from € 75,000 to around € 19,000, today the price remains around € 20,000 , demonstrating ample confidence of traders and high trading volumes.

The main cause has been the rush of small and medium investors to get rid of those more volatile positions , such as cryptocurrencies. Finally, today's price contraction is less severe than the collapse that occurred in 2018, in which there was a 70% loss in value.

What to buy for the future: fine wine

In the last 3 years the wine sector has been at the center of attention, thanks to the Covid-19 pandemic. In fact, with people forced to stay at home by lockdowns, the online sales of commercial and fine wine have dragged the market to Italy, but also to the world.

The growth was 22%, a return that led analysts to evaluate wine as a new safe haven for 2022 . In fact, a quality bottle can offer you an annual yield between 5% and 10% .

Today's market has obviously been affected by the rise in transport prices and the rise in the price of energy. In the first months the sector recorded a loss of 9.6%. The prospects for the end of the year, however, seem to determine a recovery that will eliminate any negative positions.

NFT (non fungible token)

We close the new safe haven sector with NFTs. The acronym identifies non-fungible tokens , that is a unique cryptographic code, developed on the blockchain and which is the expression of a digital work. NFTs are works of art, drawings, gifts, music, videos and programs that are created online and sold on specific platforms called marketplaces ..

Here we will focus on what are their characteristics that have led them to be defined as safe-haven assets. The concept of uniqueness is the main element that allows prices to rise. Just consider that the most expensive NFTs have reached values between 70 and 91 million dollars .

In fact, as for works of art, the prices of NFTs are linked to the price and offer ratio . Furthermore, they are not unlisted assets and therefore are independent of market trends.

To this you must add that the whole NFT sector is experiencing a moment of growth . In recent months, the turnover has reached 41 billion dollars, a sum that encompasses the entire traditional art market.

Is it worth investing in safe haven assets? pros and cons

Safe -haven assets are a safe haven if you have a portfolio with assets that have undergone a market crisis, losing money. In fact, thanks to them you will be able to balance it and also obtain returns .

Also, if you have cash, they are a solution to avoid seeing your money eroded by inflation. However, you must consider that the investments you are going to make are not short-term.

When it comes to safe-haven assets, the strategy is in the medium and long term and you will therefore have to calculate your return over a period of time ranging from 3 to 10 years. Here are all the pros and cons.

Benefits

they keep their value;
the prices grow over time;
they are easily monetized;
resist the increase in the rate of inflation;
they are not affected by geopolitical crises or by moments of default;
offer various investment opportunities.

Disadvantages

investment strategies must be medium and long term;
to invest you will need to consider an important initial capital;
returns are obtained after 3-10 years.

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