These are troubled days for the stock market. The CBOE Volatility Index (VIX), often referred to as Wall Street’s fear gauge, is spiking amid rising concerns that interest rates will remain higher for longer as inflation proves sticky and the U.S. economy slows down. In the past month, the VIX has risen 22% and is now sitting at its highest level since last October when the stock market entered a 10% correction after declining for three consecutive months.

The current spike in the VIX tells us that market sentiment is extremely bearish right now and the current decline in equities could continue over the near-term. Investors are understandably nervous. But what to do? The good news is that there are options available. Savvy investors can steer capital to safe harbors in this market storm. Known as safe haven assets, these products serve to insulate and protect investors’ hard earned money from market declines. Here are three investments to hedge against rising volatility as the VIX spikes.

Investments to Hedge Volatility: Gold

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Gold remains one of the best places to put money in times of volatility. The price of gold has pulled back in recent days as tensions ease in the Middle East and is currently trading at just over $2,300 an ounce. However, gold has reached successive all-time highs through four months of the year. In March, gold’s price peaked at a record $2,431.55 an ounce. Much of the upward momentum has been due to central banks around the world buying bullion amid escalating global tensions.

Investors nervous about a spike in the VIX should follow the lead of central banks and allocate capital to gold, either through an exchange-traded fund (ETF) that tracks the price movements or through buying gold bars. Incidentally, gold bars can be purchased at Costco Wholesale (NASDAQ:COST) and have proven to be a bestseller for the company in recent months. Despite the current pullback, gold’s price is still up more than 10% on the year.

Stablecoins

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Stablecoins are an increasingly popular corner of the cryptocurrency market. For those who are unfamiliar, stablecoins are cryptocurrencies whose value is pegged to another asset, typically the U.S. dollar of price of gold bullion. Because of their peg to assets such as the U.S. dollar, stablecoins are viewed as a safe crypto whose price is not prone to volatility, making them an increasingly popular choice among investors who are worried about big price swings and the ups and downs of the stock market.

Market data shows that the number of people invested in stablecoins is fast approaching 100 million, having increased 15% so far in 2024. Currently, there are about 35 stablecoins in existence that have a combined market capitalization of $157 billion. Tether (CCC:USDT-USD) is the industry-leading stablecoin with a current market cap of $114.07 billion. It accounts for more than 80% of all stablecoin held by investors.

A 2022 report by the U.S. Federal Reserve was bullish on stablecoins, noting that they can serve many purposes, including cross-border payments, internal fund transfers, and liquidity management. A recent report from ratings agency S&P Global (NYSE:SPGI) forecast that U.S. banks will eventually adopt stablecoins.

Money Market Funds

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Investors who have sold out of stocks as the VIX has spiked and are sitting on cash should move it to a money market fund ASAP. With interest rates elevated, money market funds offered through brokerages such as Vanguard and Fidelity are currently paying 5% interest, the highest level in years. And a good deal more than the 0.5% interest earned in a typical bank account. For investors looking to sit out the current market downdraft, placing cash in a money market fund that’s yielding 5% is a reliable bet.

Investors who have $100,000 in cash on hand can earn up to $5,000 in interest from a money market fund that offers an interest rate of 5%. It’s important to check and see what the current interest rate offered on money market funds is at your brokerage as many institutions are not promoting the high interest rates or alerting their customers to the attractive rates. But moving money into a money market account could be the difference between earning some interest on a cash balance and earning none.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.