Where can investors find safety from the market oscillations triggered by the Iran war? There are no reliable havens right now; even the dollar, typically the biggest beneficiary of a flight to safety, has made only modest gains compared with the world’s major currencies. Monies that are flowing into the greenback are evidently not being invested so much in US equities or bonds, both of which are struggling, but instead are being parked in cash. Gold has lost a quarter of its value from its peak at the end of January; and Bitcoin is down by more than 40% from its October record, dashing any hopes that crypto would offer a refuge in times of stress.

Volatility has soared across almost every asset class. Although US and European equity markets have suffered relatively modest losses so far, it's hard to see this lasting if yields in fixed income markets continue to anticipate roaring inflation. To be fair, asset classes that have posted strong gains of late become easy access liquidity sources. Gold, for example is still up 35% in the past year and 130% higher in the past five years; central banks that stocked up on the yellow metal in recent years may tap those reserves to meet energy and defense requirements if this conflict persists.

© Bloomberg