#RiskRewardRatio
During times of economic fluctuations and disturbances, investors seek safety before profits. What is the safe haven?
And why does it play a crucial role in risk management?
A safe haven is a financial asset that is expected to retain its value or rise during periods of economic or geopolitical instability when confidence in financial markets declines.
Its main characteristics:
1. Low risk
2. High liquidity
3. Retains value during crises
4. Not easily affected by market fluctuations
Common examples:
Gold
US Dollar
Swiss Franc
US Treasury Bonds
Some types of real estate and commodities depending on the context
Why is it important?
Its primary role is to protect capital and mitigate losses during sudden crashes or crises.
Note !!!!!
Not all assets are always safe havens; the economic and political context plays a key role in determining that...