Financial common hedge assets at a glance

Recently by the impact of many events, domestic and foreign are not calm, foreign stock markets fell, the domestic is also falling, and not only appeared a number of bearish voices, there are a lot of people worried about a new round of financial crisis is about to break out.

For the aftermath of how the market performs, how the international and domestic financial situation is transformed, we leave aside. Only, if you are really worried about the outbreak of the crisis, then you can also appropriate configuration of some safe-haven assets.

What is "safe-haven assets", as the name suggests, used to hedge the risk of assets, and generally have so many characteristics:

1. other assets are falling, but it does not fall, and also the probability of going up;

2. easy to carry, to give an extreme example, to fight the war, you hold the yuan!

3. easy to realize, it is best to realize across the region.

Common hedge assets, there are the following so several:

(a) gold

Gold since ancient times is one of the most common hedge assets, after all, it is good to carry, and in which place everyone recognizes its value. Even though the currencies of various countries have been decoupled from gold, central banks generally store huge amounts of gold, which shows its importance. Every time some black swan events occur in the world, gold will always rise in price, so that everyone is still very recognized its safe-haven properties.

(ii) the dollar

What is the reason for recognizing the dollar as a safe-haven asset? Because it has a strong "liquidity". During the global financial crisis in 2008, the 3-month LIBOR dollar rate and 3-month U.S. Treasury yield spread (TED spread) from 0.19% soared to 4.6%, during the period of high-quality liquid assets, including gold and U.S. bonds were sold across the board. What a concept! In the midst of a worldwide financial crisis, if you were looking for one asset that is widely recognized and freely circulated everywhere you go, it would be the U.S. dollar! Hold the dollar, go everywhere, is roughly the same meaning. So, the strong position of the dollar is such a strong law.

(C) Swiss franc

Why is the currency of such a small country a safe-haven asset? The main reason is that Switzerland is a permanently neutral country, which implements an extremely strict banking secrecy system (think why many corrupt officials and businessmen's money in Swiss banks), and the entire country almost no external liabilities (think of Iceland, which declared national bankruptcy), so the credit of this country's currency is relatively high, and it is also relatively safe.

(4) the yen

The yen itself does not want to become a safe-haven asset, it does not have what we said above, widely recognized, high liquidity, credit super high these characteristics, but it is very suitable for capital arbitrage operations. Japan's long-term domestic policy of zero interest rates, therefore, domestic and foreign investors tend to borrow low-cost yen, to other high-yield currency assets, from which to earn the difference, but if the market fluctuations in the time it, investors will want to bag for peace, this time will sell high-yield currencies, buy back the yen and other low-interest currencies to close the position, so that a short period of time instead of boosting the yen's appreciation. As a result, the yen has become a passive safe-haven asset. At the same time, the yen is also often used as a measure of whether a deflationary crisis occurs, that is, when the yen soared, it is often possible because of the occurrence of a deflationary financial crisis.

Of course, here we must remind you that in recent years, the capital markets have been going weird, and a lot of the so-called "safe-haven assets" that we used to think of are often out of whack, and safe-haven assets are not safe-haven.

If you ask me, the real risk-free safe-haven asset is actually our own talent and ability. When the financial crisis happens, we have no career hard skills to avoid layoffs, and we have no side business hard skills to continuously improve our living standards, which is the real anti-risk currency, don't you think?