Investor trends during periods of geopolitical risk in Turkey: Which assets serve as safe havens?

Abstract

This study investigates the safe-haven properties of different asset classes during periods of geopolitical risk in Türkiye and examines their comovement with the Geopolitical Risk Index. The research covers the period from January 2010 to January 2023 and employs wavelet coherence analysis and quantile-on-quantile regression methods. The findings reveal that geopolitical risk has varying long- and short-term effects on financial markets and housing prices. Additionally, our results show that the housing market can anticipate geopolitical risk fluctuations in the long run, and investors tend to shift to real estate during high-risk periods. Although gold acts as a safe haven in both the long and short run when geopolitical risk rises, oil prices respond in various ways in terms of direction and timing. Furthermore, fixed-income instruments are not perceived as safe-haven assets during periods of heightened geopolitical risk; instead, they tend to increase in parallel with perceptions of rising risk. The findings offer valuable insights into how investors formulate strategies during periods of uncertainty and have significant implications for policy makers and market participants. © 2025 Borsa İstanbul Anonim Şirketi