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Safe Asset

What is 'Safe Asset'

Assets which, in and of themselves, do not carry a high likelihood of lawsuit risk. Mere ownership of this type of asset does not expose the asset owner to a significant risk of litigation.

Assets such as stocks, mutual funds, bonds, bank accounts and your personal residence are examples of safe assets.

Explaining 'Safe Asset'

The distinction between safe assets and dangerous assets is particularly important in asset-protection planning. Mixing the two could cause contamination of the safe assets by being housed in an investment vehicle with dangerous assets. Safe assets, due to the relatively low degree of litigation risk involved with their ownership, can be owned together with other safe assets. However, safe assets are also more vulnerable to creditor seizure to satisfy a debt or judgment.


Further Reading


Safe asset scarcity and aggregate demand
www.aeaweb.org [PDF]
… 2019. Gold as Safe Haven for G-7 Stocks and Bonds: A Revisit. Journal of Quantitative Economics 17:4, 885-912 … 2019. Corporate financial asset holdings under economic policy uncertainty: Precautionary saving or speculating?. International Review of Economics & Finance …

Chasing unicorns: The European single safe asset projectChasing unicorns: The European single safe asset project
journals.sagepub.com [PDF]
… 2019. Gold as Safe Haven for G-7 Stocks and Bonds: A Revisit. Journal of Quantitative Economics 17:4, 885-912 … 2019. Corporate financial asset holdings under economic policy uncertainty: Precautionary saving or speculating?. International Review of Economics & Finance …

A model of the safe asset mechanism (sam): Safety traps and economic policyA model of the safe asset mechanism (sam): Safety traps and economic policy
www.nber.org [PDF]
… 2019. Gold as Safe Haven for G-7 Stocks and Bonds: A Revisit. Journal of Quantitative Economics 17:4, 885-912 … 2019. Corporate financial asset holdings under economic policy uncertainty: Precautionary saving or speculating?. International Review of Economics & Finance …

How safe is a safe asset?How safe is a safe asset?
papers.ssrn.com [PDF]
… 2019. Gold as Safe Haven for G-7 Stocks and Bonds: A Revisit. Journal of Quantitative Economics 17:4, 885-912 … 2019. Corporate financial asset holdings under economic policy uncertainty: Precautionary saving or speculating?. International Review of Economics & Finance …

The safe assets shortage conundrumThe safe assets shortage conundrum
www.aeaweb.org [PDF]
… 2019. Gold as Safe Haven for G-7 Stocks and Bonds: A Revisit. Journal of Quantitative Economics 17:4, 885-912 … 2019. Corporate financial asset holdings under economic policy uncertainty: Precautionary saving or speculating?. International Review of Economics & Finance …

Foreign safe asset demand and the dollar exchange rateForeign safe asset demand and the dollar exchange rate
www.nber.org [PDF]
… 2019. Gold as Safe Haven for G-7 Stocks and Bonds: A Revisit. Journal of Quantitative Economics 17:4, 885-912 … 2019. Corporate financial asset holdings under economic policy uncertainty: Precautionary saving or speculating?. International Review of Economics & Finance …

Global imbalances and financial fragilityGlobal imbalances and financial fragility
pubs.aeaweb.org [PDF]
… 2019. Gold as Safe Haven for G-7 Stocks and Bonds: A Revisit. Journal of Quantitative Economics 17:4, 885-912 … 2019. Corporate financial asset holdings under economic policy uncertainty: Precautionary saving or speculating?. International Review of Economics & Finance …

When safe proved risky: Commercial paper during the financial crisis of 2007-2009When safe proved risky: Commercial paper during the financial crisis of 2007-2009
www.aeaweb.org [PDF]
… 2019. Gold as Safe Haven for G-7 Stocks and Bonds: A Revisit. Journal of Quantitative Economics 17:4, 885-912 … 2019. Corporate financial asset holdings under economic policy uncertainty: Precautionary saving or speculating?. International Review of Economics & Finance …

The history and economics of safe assetsThe history and economics of safe assets
www.annualreviews.org [PDF]
… 2019. Gold as Safe Haven for G-7 Stocks and Bonds: A Revisit. Journal of Quantitative Economics 17:4, 885-912 … 2019. Corporate financial asset holdings under economic policy uncertainty: Precautionary saving or speculating?. International Review of Economics & Finance …



Q&A About Safe Asset


What is the difference between safe and dangerous assets?

Dangerous assets have a higher degree of litigation risk than safe assets.

What are safe assets?

Safe assets are those that do not carry a high likelihood of lawsuit risk.

What happens when you mix your safe and dangerous investments together?

You run the risk of losing your entire portfolio if one investment goes bad.

How can you protect yourself from this type of loss?

By keeping all your investments separate, or at least as separate as possible.

Why is it important to distinguish between safe and dangerous investments?

Mixing the two can cause contamination of the safe investments by being housed in an investment vehicle with dangerous investments.

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