Why Investors Should Consider Safe Haven Assets amidst High Interest Rate Scenarios

The Federal Reserve has increased the interest rates by more than 10 times, one of the fastest in the entire history of the Federal Reserve and the United States in an effort to combat inflation.

This has led to a rise in the cost of borrowing money, which is making it more expensive for businesses to invest and grow and triggered an economic slowdown. As a result, investors are looking for safe haven assets that will protect their money from inflation and economic volatility.

There are few of the safe haven assets that I generally recommend to my clients. One of them is real estate funds and another one is Sukuk and Murabaha funds.

• Real estate funds invest in real estate assets including but not limited to commercial property and residential homes. Real estate is a tangible asset that has historically held its value well during times of economic turmoil. Additionally, real estate can generate income through rent payments, which can help to offset the effects of inflation. Furthermore, real estate prices has gone down worldwide except few instances which makes it a best time to enter in this asset class.
• Sukuk & Murabaha funds are Islamic funds that invest in fixed income financial instruments that are compliant with Islamic law.?Sukuk & Murabaha funds are considered to be safe haven assets particularly in times of high interest rates as they are well positioned to gain as the interest rate landscape eventually stabilizes over the upcoming years.

Here are some of the reasons why investors should consider safe haven assets such as real estate funds and Sukuk & Murabaha funds:

• They offer protection from inflation: Inflation is the rate at which prices are rising, and it can erode the value of investments over time. Safe haven assets, such as real estate and Sukuk & Murabaha funds, tend to hold their value well during times of inflation.
• They offer diversification: A diversified portfolio is one that is spread out over a variety of assets, such as stocks, bonds, and real estate. This helps to reduce risk, as a loss in one asset may be offset by gains in another asset. Safe haven assets can help to diversify a portfolio and reduce risk.
• They offer income: Many safe haven assets, such as real estate, can generate income through rent payments and Sukuk & Murabaha funds can generate regular flow of income through profit distribution or other means. This income can help to offset the effects of inflation and provide a steady stream of cash flow.?

If you are an investor who is looking to protect your money from inflation and economic volatility, then you should consider investing in safe haven assets. These assets can help you to preserve your wealth and achieve your financial goals.

Disclaimer: This is not a financial advice and it is for education purposes only. If you have any questions or want to know more about any of these assets please get in touch with me directly.