For investors eager to find assets to hedge against a global market crash, the global stock market turmoil and the recent jump in volatility in the U.S. stock market have raised alarms.
In turbulent times, American bonds, gold, London's real estate and even bitcoin can attract investors. In the foreign exchange market, the US dollar, the Swiss franc and the yen are traditionally wise choices.
But the problem in recent months is that the performance of these assets is rarely matched by its reputation for risk aversion. The yen has fallen 7% against the dollar since March, despite worries about trade wars, stock market volatility and Italian public spending plans.
The Swiss Franc has risen 2% against the euro so far this year, but has fallen since early September, despite stagnant budgetary spending by Italian and European governments.
It is widely believed that German and U.S. government bonds have been too high after a 10-year bull market, and gold, often seen as an inflation-resistant commodity, has fallen by 5% this year.
Only the dollar stands out because of its position as the world's most liquid currency, its strong U.S. economy and interest rate hikes.
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