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It has become much more difficult for Swiss people to set aside some money each month. Higher food prices, huge increases in health insurance premiums, rents are rising, and many households are now facing high utility bills.
Result: Wage increases in recent years have not kept pace with rising costs. If you can still put money aside, you should keep a few points in mind. Otherwise, you run the risk of being disappointed when you look at your savings.
Filling the piggy bank – does this make sense?
For some, this is a daily ritual: after the working day, the wallet is lightened and the piggy bank is filled with heavy coins. At some point the happy moment comes and the piggy bank is emptied. But this type of savings is a bad idea. Since there is no interest, the piggy bank consumes the entire cost of inflation from savings every year.
Is a savings account worth its name?
At some banks, customers receive one percent interest on their savings accounts. It doesn’t sound so bad at first. But with current inflation at 1.7 percent, savings accounts are a waste of money right now. And it’s likely to stay that way for a while: Raiffeisen expects annual inflation to be 1.8 percent in 2024.
Where is the lowest risk found?
Fixed-term deposit accounts offer better interest rates if some of the savings can be set aside for several months: for twelve-month maturities, interest rates range from 1.3 to 1.8 percent for most providers. Ideally, interest income almost offsets inflation. However, in many banks the minimum amount for a term deposit account is 100,000 francs. Please note: Income is subject to income tax.
I want to invest conservatively, but how?
In corporate bonds, investors receive a fixed interest rate over several months or years. Raiffeisen investment director Matthias Geissbühler (48) recommends bonds of Swiss companies with ratings from triple B to triple A. “Risk is relatively manageable here, and yet returns are above 2 percent, sometimes even 2.2 to 2.3 percent inland.”
Is it time to enter the stock market?
There are currently signs of a small uptick in stock markets for the end of the year. So how sustainable is development? “We expect a slight recession in the US in the first half of 2024, and this is likely to have another impact on the stock markets,” says Anja Hochberg (53), head of mixed investment solutions at Zürcher Kantonalbank (ZKB). “As for stocks, you should therefore pursue a more defensive strategy now and then buy in the first half of 2024.”
What method should I follow when investing?
If you don’t yet own any shares and are considering participating, you should invest gradually over twelve months, says Geissbühler. “This way you can offset the risks of short-term price fluctuations.” There are currently stocks that do not respond as strongly to the economy. “These include, for example, pharmaceutical or food companies,” says the investment director.
Should I invest in the short term or long term?
If you want to make a lot of money quickly in the stock market, you can burn your fingers. Are you thinking of buying a single stock at the right time and selling it again a few months later, hoping to make a big profit? This is not recommended for average investors. “80 percent of investment success can be attributed to long-term strategy and only 20 percent to timing,” says Hochberg.
How can a portfolio be put together?
Anyone who invests must spread the risks widely. A balanced portfolio for smaller wallets might look like this in the first half of 2024, according to Anja Hochberg: A bond share of 38 percent, with the bulk of this invested in Swiss bonds. Here too, there is a strong focus on Switzerland, with 47 percent of stocks. Twelve percent is distributed among alternative investment funds such as Swiss real estate or gold. Plus a reserve in the bank account. “Stocks can be bought and bonds sold in the second half of the year,” says Hochberg.
How much risk do I want to take?
Anyone investing should carefully consider how high their own risk tolerance is. “Everyone copes with temporary loss differently. As a result, if you cannot sleep well, you should invest more cautiously,” says Geissbühler. It is also important that you can do without the money you invested for a long time in case the stock market develops unpleasantly.
What about Swiss stocks?
Predictions for the Swiss stock market are more positive: “Swiss stocks in particular have corrected above average in recent months, mainly due to company-specific factors. We assume that they will perform better in a challenging environment due to their defensive nature,” says Hochberg. Therefore, you can now add shares of Swiss companies to your portfolio.
Valuation of Swiss stocks is in line with the long-term average. “We have quality companies. “I will focus on the Swiss market when buying shares at the moment,” says Geissbühler.
What is the role of foreign exchange risks?
Geissbühler currently urges caution when purchasing foreign bonds and shares. Raiffeisen predicts a low economic growth of 0.5 percent in the USA for 2024. In Europe, the economy may shrink even by 0.1 percent. “There is also still a large inflation gap between Switzerland and the US and Europe. “Therefore, the Swiss franc is likely to continue to appreciate and therefore consume some of the profits from investments in foreign currencies,” he said.
ZKB predicts slightly higher growth figures for the USA and Europe. “If you are willing to take the risk, the position in foreign stocks can certainly be expanded in the second half of 2024,” says Hochberg.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
