Tags: geopolitical | invest | safe | turmoil

WSJ: How to Invest for Safety Amid Geopolitical, Fed Turmoil

By    |   Monday, 08 September 2014 02:31 PM

As a prudent investor, you may well be worried about the impact on your portfolio of heightened geopolitical conflict and the possibility of an early interest-rate hike by the Federal Reserve.

Military battles rage throughout the Mideast and in Ukraine. Meanwhile, some economists believe recent signs of stronger economic growth will push the Fed to raise rates before the middle of next year.

So how can you can you navigate these shoals to invest safely? The Wall Street Journal offers several suggestions.

Editor’s Note: 5 Shocking Reasons the Dow Will Hit 60,000
  • Bonds. "When it comes to safe-haven investments, high-quality, shorter-term bonds, including U.S. government bonds and corporate debt, top many investors' lists," writes Journal reporter Erin McCarthy.
  • Cash and gold. With a safe cash investment, inflation is your only risk. And gold often thrives in times of inflation.
  • Currencies. Some currencies act as safe havens in times of turmoil, especially the dollar and the Swiss franc.
Of course, you should already have a diversified portfolio including these assets before trouble hits, rather than rushing into them then, financial advisers tell The Journal.

Meanwhile, CNNMoney cites four common investment mistakes you should avoid.
  • Failing to invest in stocks. They offer the best long-term returns of standard assets, yet many Americans are afraid of them after their 2008-09 plunge.
  • Investing in riskier assets. With interest rates low, many investors are venturing out on the risk curve.
  • Short-term thinking. Investors often purchase assets based on past returns rather than future potential.
  • Forgetting inflation. At some point inflation will rise. Many investors aren't ready for that.
Editor’s Note: 5 Shocking Reasons the Dow Will Hit 60,000

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As a prudent investor, you may well be worried about the impact on your portfolio of heightened geopolitical conflict and the possibility of an early interest-rate hike by the Federal Reserve.
geopolitical, invest, safe, turmoil
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2014-31-08
Monday, 08 September 2014 02:31 PM
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