Recently, I’ve been thinking about a question—what should investors do when the market experiences significant volatility? Actually, many people's approaches are quite similar—they look for relatively stable assets that are less likely to depreciate to hedge risks. That’s why safe-haven currencies have always been an indispensable part of investment portfolios.

Speaking of safe-haven currencies, the most familiar ones are none other than the US dollar, Japanese yen, and Swiss franc. The US dollar, as the global reserve currency, has unbeatable liquidity; whenever the market panics, large amounts of capital flow into the dollar. The yen is popular in carry trade because of its low interest rates and strong liquidity. The Swiss franc, on the other hand, is considered one of the safest currencies due to Switzerland’s neutral policies and stable financial system. Although the euro ranks second, it has recently begun to attract the attention of many investors.

But besides traditional safe-haven currencies, gold has always been the most classic safe-haven asset. It is a physical asset, unaffected by government money printing, and has a strong correlation with the dollar, making it especially attractive during market turbulence. There’s also the VIX volatility index—when the stock market declines and investors panic, the VIX surges. Holding some VIX-related products in a portfolio can be a good choice during such times.

Bitcoin is dubbed “digital gold,” but frankly, it still has many issues as a safe haven. Its market cap is too small, liquidity is insufficient, and there’s a lack of historical data. Plus, various policy and technical factors influence it, making its volatility far greater than other safe assets, which makes it hard to truly serve as a hedge. Currently, most people buy Bitcoin for speculative reasons rather than risk mitigation.

Regarding trading methods, traditional options include spot forex, futures, options, and ETFs. However, in recent years, contracts for difference (CFDs) have also become an option. The advantages are that they support two-way trading and leverage, allowing investors to profit whether the market rises or falls. Of course, high leverage also means high risk, so caution is necessary.

In fact, the triggers for safe-haven sentiment are quite clear—significant stock market declines, surging VIX, geopolitical risks, worsening economic data, or sudden black swan events. Whenever these situations occur, safe-haven currencies and tools become the market’s focus. For investors, constructing a balanced portfolio that includes safe-haven currencies and instruments is the right approach to cope with market uncertainties.