With the markets in high volatility, mainly downwards, everyone is seeking safe havens. While the Swiss Franc and other stable currencies may be good in the short term, these currencies have risen so much that they are adversely affecting national exports and may well be revalued by their governments. This will wipe out gains made on these investments and may well incur losses for these currency holders. So what can one do to protect his money in this uncertain market?
As a defensive measure, large blue-chip companies with excellent balance sheets are likely to protect one’s money. While they are not likely to make big profits, they will probably not lose much either. Companies such as Microsoft and Johnson and Johnson have good cash reserves and are very stable. Microsoft has dropped a little with the whole market but is still within its yearly range and is recouping. Johnson and Johnson had a one year spread of 59 to 68 dollars and now has gone down to 62. In the midterm, 1-3 years, these large caps are likely to hold their own with the best of them and protect one’s investment.
Right now is the time to play it safe. Go with the large cap multi-nationals for the next year or more until the dust settles.
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