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A place where investors can place their funds where they will be safe from international volatility. The US Treasury Bills (T-Bills) are the classic safe haven investment, but they often offer a return which is below the inflation rate in America. For example, following COVID-19 in 2020, the 10-year T-Bill had an effective yield of about 0,75% when the US inflation rate was 1,4%. The other major safe haven investment is gold. Both of these investments only have the benefit that they immunise investments against the volatility in paper currencies - but they do so at a cost because neither offers any significant return. To obtain a real return investors must take some sort of risk. The international investment community typically oscillates from being "risk-off" to being "risk-on". When they are risk-off they move out of emerging markets like South Africa and into US T-Bills and gold. The opposite happens as soon as they feel more secure - because they are always looking to get a decent return on their money. When the S&P500 entered a bear trend on 13th June 2022, sentiment shifted strongly towards risk-off and that accounts for the sharp weakening of the rand as investors pulled their money out of South Africa and other emerging economies. The US dollar strengthened to the point where it was at parity with the euro for the first time.

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