Market jitters sparked by the growing turmoil in the eurozone and fears of a meltdown in the single currency have sparked a massive flight from risk. But traditional 'safe havens' might not be as safe as you think, and you certainly don't want to dismantle an equity portfolio every time the market suffers a bout of volatility. So is there another way to de-risk a portfolio, particularly one held in a tax wrapper, where selling might mean relinquishing valuable tax benefits?
The traditional safe havens during troubled times were quality government bonds and gold. But bond prices have been on an epic bull run and look expensive. Gold has been very volatile lately, while inflation continues to chip away at cash holdings yielding paltry returns.
These investments still have a role to play in a balanced portfolio, but there are other, more innovative ways to de-risk.