5 Safest Places To Keep Your Money During the Iran War
Written by
John Csiszar
Edited by
Jenna Klaverweiden
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As the uncertainty of the Iran war unfolds, investors are looking for safe havens for their money. Between the uncertain duration and outcome of the war, investors are also concerned about the price of oil and supply chain disruptions.
With the memory of similar upheaval during the COVID-19 pandemic in the not-too-distant past, so-called “flight to safety” assets are once again spiking higher, drawing money away from riskier investments like stocks.
Here are five of the safest places you can put your money during times of war, according to experts.
1. Gold
When it comes to safe-haven assets, gold is often at the top of the list. The reason is gold has intrinsic value. It does not rely on any government, currency or economic productivity to make it sparkle.
Gold is “an effective portfolio diversifier that can help hedge against a range of market and economic risks,” analysts at UBS wrote in a recent investment outlook, noting that demand for the metal tends to increase when global tensions rise.
Bridgewater Associates founder Ray Dalio has also encouraged investors to hold gold as a portfolio stabilizer. “If you don’t own gold, you know neither history nor economics,” he said.
2. US Treasury Securities
U.S. Treasury securities often attract investor funds during geopolitical turmoil because they are backed by the full faith and credit of the U.S. government. According to the Securities and Exchange Commission, they are generally considered among the safest investments in the world.
That reputation makes government bonds a frequent target for investors seeking stability during geopolitical shocks.
3. High-Yield Savings or Money Market Accounts
Many investors sell their stocks and bonds during wartime and simply hold cash. Much of that money makes its way to FDIC-insured high-yield savings or money market accounts. This allows the funds to continue to earn interest, although usually at a modest rate, while offering stability and immediate access.
4. The US Dollar
The U.S. itself is still seen as a place of refuge during tumultuous times, and that attracts investors into its currency as well.
As reported by Barron’s, David Morrison, senior market analyst at Trade Nation, recently wrote, “The U.S. dollar remains the go-to safe-haven currency for investors.”
5. Defensive Stocks
Certain stocks are considered more defensive than others, and they generally attract investor dollars during uncertain times. You still have to pay your electric bill, travel to work and eat no matter what’s happening in the economy, so companies that provide these goods and services tend to hold up better than more discretionary businesses.
“Even during recessions consumers generally cut other spending before they stop paying their utility bills,” as explained by Charles Schwab.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
This article is for informational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of principal. Always consider your individual circumstances and consult with a qualified financial advisor before making investment decisions.
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