From Morningstar: 2025-05-19 10:53:00

In 2025, global market expectations on the economy and free trade have changed drastically in just a few months. The definition of a “safe haven” asset has been overturned, leaving investors questioning what counts as a safe investment. US Treasuries and the dollar, previously reliable, are now under scrutiny.

Gold has seen record highs as a traditional safe haven investment, while bitcoin has also surged. The recent selloff of US Treasuries and the dollar has led investors to seek alternative options like “digital gold” in the form of bitcoin. The landscape of safe investments is shifting in 2025.

The US dollar’s weakness since the start of Trump’s trade wars has called into question its role as the world’s reserve currency. Investors have turned to the Japanese yen, Swiss franc, and euro for stability. Dollar valuation reflects its dominance in stock and bond markets, but its future as a safe haven is uncertain.

Some investors speculate that Trump’s plan to bring manufacturing back to the US includes a weaker dollar. The administration’s focus on a weaker dollar could benefit US exports and manufacturing. This strategy, along with Chinese efforts to devalue the yuan, could shape the global economic landscape.

Bonds, particularly US Treasuries, are under scrutiny as investors re-evaluate the cost of servicing America’s debt. Rising Treasury yields indicate a shift away from US assets as ultimate safe havens. Capital outflows and market repositioning have caused a recent divergence between US yields and the dollar.

Investors are navigating market volatility by re-evaluating stocks based on defensive qualities. Certain sectors in Europe, such as technology, consumer cyclical, and energy companies, have seen convincing rallies amid global trade uncertainty. Stock and industry sector positioning is seen as a robust strategy to shelter against market volatility. Some sectors like utilities and consumer defensive are less impacted by global trade, while industries like information technology and industrials heavily rely on foreign components. Industries like autos and auto parts, apparel, and accessories manufacturing have seen significant losses this year. Seek financial advice during market uncertainty for clarity and control in decision-making. Financial advice can help with pensions, retirement planning, and business sales for a clear direction.



Read more at Morningstar: Bonds, Gold, or Crypto? The Best Safe Haven Assets…