Forget Gold, Are U.S. Equities The Safest Safe Haven Investment Of All?

U.S. equities have emerged as safe havens for investors, despite the gloomy picture painted by Republican candidate Donald Trump, according to a report on CNN Money.

The U.S. stock market is sitting near record highs and the Dow has gained 3,100 points since its mid-February low.

U.S. Safe Havens

"A big factor powering the move: the U.S. is looking like a haven of stability amid all the global turmoil. And investors are betting on that safety with their dollars," the report said.

In fact, the report noted that investors don't have many options currently, and compared to bonds, which are "yielding next to nothing these days recently," stocks look very appealing.

Related Link: Looking For A Safe Haven Investment That Isn't Gold? Check Out Germany's Property Stocks

The result: U.S. stocks' MSCI index is trading 17.4 times the estimated forward earnings, according to Yardeni Research.

"That's the equivalent of a massive vote of confidence when compared with more conservative multiples assigned for the U.K. (15.9), Eurozone (13.4) and Japan (13.1)."

This shows that despite U.S. stocks being pricey, investors are willing to pay for stability.

Current Performance Isn't Always Indicative Of Future Performance

That said, just because the United States has been a target for investor safe havens "doesn't mean it will stay that way indefinitely."

CNN Money added, "Many have warned that stock market valuations in the U.S. have gotten stretched and a pullback may be coming if earnings don't improve significantly."

David Bianco, chief equity strategist at Deutsche Bank, believes a 5 to 9 percent "dip" in the S&P 500 is probable, citing that "investors 'seem too excited about improving growth' and have become 'complacent' about low bond yields," the report quoted.

"We think the bull continues, but patience will be rewarded," Bianco said.

Another concern is the probability of Trump winning the U.S. presidential elections. A news release by CNN shows support for Trump has seen a bump on the back of last week's GOP convention.

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