We live in interesting times. First, US President Trump announced he would slap hefty tariffs on imported steel and aluminium. Then, a shock attempt to poison a Russian ex-double agent in Salisbury provoked the UK and its allies to place fresh sanctions on Russia, the alleged aggressor. In these tense times, how can you maintain a portfolio that weathers any storm without the need to go short?

Many traders look to safe-havens in order to mitigate their risks, protecting their portfolios in the event of a worst-case scenario. Popular safe-havens include Gold, the Japanese Yen and Defensive stocks. Below, I’ll provide examples of just how you can trade these all-important assets.

Perhaps the best known of the trifecta, gold has been a safe-haven asset for centuries. As a finite asset with an accepted store of value, investors have nearly always looked towards the yellow metal.

The precious metal was in particular demand during the 2008-09 financial crisis and the ensuing Eurozone debt crisis in 2011, climbing to $1921/troy oz. While it retreated until the start of 2016, the Chinese stock market crisis, the UK’s vote to leave the EU and Donald Trump’s election as US president have seen fresh investor demand for Gold.

Having traded within 1% of EU referendum-inspired 2016 highs in January, gold has edged back in recent weeks. However, with tensions ramping up once more, will there be fresh demand for the non-yielding asset?

While not always viewed as a ‘sexy’ trade, the Japanese Yen is though of one of the world’s leading safe-havens. Even as North Korean leader Kim Jong Un launched missiles into the Sea of Japan during a tense few months in late 2017, the Yen appeared to be relatively unmoved, despite the massive escalation in the threat of war in South Asia. Why was this?

Japan’s government is one of the biggest investors in foreign debt in the world, owning an estimated $11 trillion of US debt in 2017, while purchasing $8.7 billion of German debt in January. It’s thought that a global stock market sell-off would see many traders retreat to the Japanese currency to insulate against risks elsewhere.

Popular currency pairings, such as USD/JPY and EUR/JPY, are particularly appealing to those looking to gain specific protection from certain economic areas, such as the US or Europe.

Finally, defensive stocks peak the interest of those looking to protect themselves against market sell-offs whilst still allowing them to invest in blue chip equities.

These companies may not have the best share price growth prospects, however they do tend to have relatively inelastic demand patterns – the products they make are in demand all year, and that demand is unlikely to disappear in the case of a downturn.

Examples of defensive sectors on the UK 100 include Alcohol and Basic Goods makers (ABF, DGE, RB. and ULVR), Pharmaceuticals (AZN, GSK and SHP), Tobacco (BATS, IMB) and Utilities (including energy providers such as CNA, NG., SVT and UU.).

Ultimately, the choice of when and how you choose to protect your portfolio is up to you. However, knowing the best available options to hedge yourself against any scenario is the first step to outperforming other traders and markets, even as the rest of the world struggles to turn a profit.

While there may be some issues hanging large over geopolitics and financial markets, the most important trading tool you can equip yourself with is a tried and trusted source of information.

This week, ADVFN named Accendo Markets the best CFD Research Service for the second consecutive year. Find out for yourself how we can complement your trading by signing up to have our research delivered directly to your inbox.

Chris Peters, Trader, 16 March