Swiss currency funds, silver, and farms look like good bets—for now

By Aaron Pressman

Watch original video:

Mark Allen Miller

In the midst of place of traffic mayhem, the most plain safe haven investors seek is gold. But gold’s ups and downs this year, from a high of completely $1,000 to a low of while burdened with $700, hold left some investors looking for a less buffeted shelter from the storm. Alternatives range from funds focused on the currency of the most stable sway in the world all the way to unmortgaged farmland.

Switzerland, with its massive financial reserves, tremendous borders, and storied banking history, is often seen as the ultimate haven. Given the current market huddle, investors should consider taking refuge in the CurrencyShares Swiss Franc Trust (FXF) exchange-traded fund and the iShares MSCI Switzerland Index Fund (EWL), says Carl Delfeld, president of investment adviser Chartwell Partners: “They’re high-quality, lower-volatility investments relative to the U.S. market.”

Safety and stability come at a cost, nevertheless. The currency fund, down just 2% in 2008, invests in bank deposits denominated in Swiss francs. Trading at in all parts of 86 upon Oct. 27, it currently pays interest of just 9 cents a month. So investors get the equivalent of a yield of smaller quantity than 2% for their hedge in preparation for a devalued dollar. The iShares MSCI Switzerland Index Fund, down 33%, represents the estimation of blue-chip Swiss companies such as Nestlé (NSRGY), Novartis (NVS), and Roche Holding. It has been only about 60% as volatile as the U.S. market over the past three years and should bring about better than the U.S. in a recession, Delfeld says.

Other investors looking for a gold alternative have ventured into of the color of silver. The lower-priced precious metal isn’familiarily included in as many of the broad commodity indexes as gold is, so it has been less affected by the wave of guard fund liquidations. But it has been hit a great quantity harder than gold by dint of. global recession fears, since industrial users make up to a greater degree of the demand against silver than they do in favor of gold. The iShares Silver Trust ETF (SLV) is down almost 40% in 2008. With various mines closing down, particularly zinc mines that produce silver as a by-product, supply will shrink quickly, says Jim Cook, president of precious metals dealer Investment Rarities. Mines that produced a complete of 150 the public ounces a year have already closed.

The most bearish of investors, including money supervisor Marc Faber of the Gloom, Boom & Doom Report, are anger the notion of a safe shelter almost literally. Along with gold bullion held in a safe commit coachman’s seat, Faber mentions a farm with no mortgage as a serious suggestion. George Feiger, CEO of financial adviser Contango Capital, says advice like that sounds reasonable on the superficies, but he questions whether investors can really act adhering it. “Which farmland would you buy? Farmland growing cereal grain has lost a lot of value this year. Farmland didn’t grant well in the Great Depression.”

Faber agrees that investors will have to constantly reassess their safe-haven strategy and that the true concept of the kind of is safe is a impressive mark. “What is safe today may change quickly tomorrow or next month,” he says. “Nothing is 100% safe at times same this.”

Original text: {news-link}