Why investors should 'stay away from safe havens'

When dinner party discussions turn to global politics or the world economy, I suspect it is highly likely they will be characterised by one thing: uncertainty. Crises like Ukraine or events like the first Chinese corporate bond default shine a light on the ambiguity faced by global investors. The knee-jerk reaction to unexpected uncertainty is often to head for assets perceived to be safe havens. Indeed, with the recent upheaval, it is not surprising to see the Swiss franc, Japanese yen, gold and government bonds – all typically seen as safe havens – supported by increasing inflows. But ...