LONDON Scared money seeking a safe haven may just head for home.
Russia's military mobilization on Ukraine's borders over the past week was an echo of the sort of geopolitical event that used to send international investors scurrying for cover over the past 50 years.
Unlike the systemic financial threats that plagued markets in recent years, the Russian scenario seemed more tangible and navigable for investors if only due to its many precedents from the height of the Cold War.
And so traditional 'safe haven' investments played out, knee-jerking higher after Russia's war games at the weekend. Gold prices jumped 2 percent; the U.S. dollar and Treasury bonds strengthened alongside other top-rated securities such as German government bonds. Japan's yen and the Swiss franc pushed higher as risky assets dived.
But the speed at which those moves unwound when Russia appeared to defuse tensions merely underlined doubts about the sense of dashing to pre-set havens in times of global stress.
A mix of extraordinary monetary policies and the perils of market timing certainly raised questions about the investment logic of recent years.
What's more, the speed with which markets shift on fluid and fast-moving events mean that overhasty decisions can push long-term savers under a steamroller.
"It's much harder now to find something you consider a truly safe haven," said George King, London-based Head of Portfolio Strategy at RBC Wealth Management, which manages more than $600 billion of assets worldwide. "These are not investable issues - these are anxiety issues."
Gold's attraction as a globally exchangeable store of value in the event of some economic Armageddon may seem obvious. But the vagaries of gold securities and investment make is less so. As anyone who bought during the seismic euro crisis in late 2011 will attest, it's down almost 30 percent from that peak.
That same 2011 crisis prompted the Swiss National Bank pledge to cap a brutal rise of its franc - historically a magnet for fleeing capital due to Switzerland's bank secrecy laws and political neutrality - and tarnished its haven appeal to boot.
The U.S. Federal Reserve's extraordinary money printing and bond buying of recent years may have enhanced the draw of super liquid U.S. Treasuries. But that too is undermined for foreign investors by the dampening effect on the dollar exchange rate.
Triple-A German Bunds had no such official boon, but their top rating, Berlin's economic strength and relatively low debts made them an island in a regional storm. Yet Germany's potential exposure to euro zone debts and pan-European monetary policy may also reasonably raise questions about the Bund's status over time.
Others have flocked to London property or fine art - but scarcity, illiquidity and high transaction costs limit speed of movement for the perennially anxious.
An alternative is to see beyond tired rules-of-thumb and just try to parse the economic fallout of any geopolitical jolt.
With the Russia/Ukraine crisis, some have focused on energy prices or the threat to Europe's fragile economic recovery. Buying oil and futures or energy stocks may be a more durable response, they argue, and could be doubled up with European bonds buoyed by another bout of monetary easing in the euro zone.
"A major casualty could be Europe's economic recovery, which is vulnerable given that the region imports roughly 25 per cent of its gas from Russia, half of which flows through Ukraine," said Luca Paolini, chief strategist at Pictet Asset Management, which steers $153 billion of equity and bonds.
The problem for non-European investors is that the euro could weaken sharply.
Yet market direction may be beside the point if you just want to avoid a wipeout.
And so perhaps the best way to view the Russia/Ukraine crisis is in the context of the year so far - mounting and perplexing political risks in developing countries unnerving rich world investors who had flocked to emerging market investment buckets indiscriminately in recent years.
Boston-based fund tracker EPFR estimates that equity investors pulled cash from emerging market funds for a record 17th straight week last month - bringing losses since early last year to some $38 billion or 5 percent of assets under management. Some $23 billion has exited equivalent emerging market bond funds over the past 14 months.
That money appears to be returning to base. As emerging markets have quaked, Wall St stocks hit new records as recently as last week and there's been a relentless surge into euro zone government debt since the start of the year.
To illustrate where the bulk of private savings still hails from, some 46 percent of the $80 trillion of global pension, insurance and mutual fund assets originate in the United States. Japan and the UK are the source of 8 percent each. And France, Germany and the Netherlands account collectively for 7 percent.
Not unlike the last major emerging markets hiatus in the late 1990s, exiting Western savers are seeking out the highest returns they can find in domestic markets to soften the hit.
And as previously booming emerging market bond sales have dried up this year, for example, sales of U.S. corporate high-yield debt have already topped a record $160 billion in just two months.
The safest haven for now, it seems, may just be home.
(Editing by Ruth Pitchford)