Key points
- Treasuries benefit from flight-to-quality; USD strengthens during global risk-off.
- Gold acts as inflation hedge and portfolio insurance.
- Safe havens reduce portfolio volatility during drawdowns.
Example
In a typical sell-off, Treasuries and gold have often risen while shares fall, softening the overall loss for investors who hold some of each.
In history
In the March 2020 crash, the 10-year Treasury yield fell by about 140 bps while shares fell 34%, and the dollar index rose about 8% in ten days as investors scrambled for dollars.
Related terms