After a bright start to 2020, stock exchanges haven’t taken long to move back into ‘fear mode’. The awful emergence of the coronavirus in China may have proved to be the spark, though as I explained recently, there are plenty of other geopolitical and macroeconomic issues that are troubling investors and could keep risk appetite across financial markets on the back foot.
The scale of tension is illustrated by recent movements in the VIX Index, a gauge that measures market volatility. It recently spiked to levels not seen since October. So is now the time for market-makers and private investors to start bulking up their holdings of safe-haven assets?
Grab a slice of gold
In that aforementioned piece I celebrated gold for its eternal role as flight-to-safety asset in uncertain times. And by extension, producers of bullion (as well as other precious metals) are also top buys for frightened investors today.
There are many such stocks to choose from, depending on your investment goals. I recently explained why Serabi Gold could prove a wise buy in the current climate, though the lack of a dividend would dissuade income investors from diving in. But these individuals could happily take refuge with Centamin instead.
Right now the FTSE 250 digger is the biggest-yielding gold play available to investors. And with a forward reading of 5.3%, its yields also sail past the broader UK mid-cap average of 3.1%.
Gold isn’t the only classic rush-to-safety commodity out there, of course. The platinum group metals have also swept higher on a mix of solid industrial and investment demand, and could continue to do so. And so Sylvania Platinum, with its 5% forward dividend yield could be a wise buy today.
3 more spectacular safe-haven sectors
It’s possible that investment flows into the defensive healthcare sector might heat up in February too. And there’s a raft of great dividend shares to buy in this particular arena.
Drugs developer GlaxoSmithKline might be a popular buy thanks to its big 4.5% dividend yield for 2020, one that outstrips the broader 4.1% forward yield for the FTSE 100. Alternatively, you can get the same yield with Integrated Diagnostics Holdings, a provider of medical diagnostic services across Africa.
The splendid earnings visibility of defence contractors allows these to pay out some generous dividends, too. Babcock International, a major engineering supplier to the Ministry of Defence, also boasts a 4.5% yield for 2020. And so does Senior, which builds aerospace parts for commercial and military planes.
However, companies in the utilities sector may be better near-term havens for yield-hungry investors. Take network operator National Grid, for example. The prospective yield here sits at 4.8%. But this pales in comparison to the yield of power station operator ContourGlobal: for 2020 this sits at a mighty 6.3%.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.