Hedges and Safe Havens An Examination of Stocks, Bonds, Oil, Gold and the Dollar

Abstract

We investigate five major financial asset classes, examining how and under what circumstances each may act as a hedge or a safe haven to each other. Using the approach of Baur and Lucey (2010) and Baur and McDermott (2010) we find that , in line with conventional investment strategies, gold acts as a safe haven for most assets, except oil. Bonds do not appear to be a longterm hedge against equity price movements but do act as a safe haven for equities.