Are you buying savings for your account or shares?

patrick berger and Rachel Lenz

The Swiss National Bank’s (SNB) rate hike, which is now one percent, has implications for consumers, savers and homeowners. Christoph Sax (46), chief economist of the Vermögenszentrum VZ, says this in an interview with Blick TV.

Rate hike helps small savers

“You notice this very directly with mortgage interest and savings interest. They will increase,” says Christoph Sax. So finally it’s worth putting money back into the bank account. However, inflation is still far above the savings interest customers receive. This again weakens purchasing power.

Changing banks won’t work

It’s not worth running directly to another bank because of the interest rate decision. But financial institutions are under pressure. Everyone will sooner or later have to raise interest rates so that customers come to them or not leave. Competition stimulates the market.

Inflation will fall

Interest rate decision softens inflation. But this will take some time. The SNB assumes inflation will return to two percent by the end of next year.

Invest in stocks

“The worst idea is to hide the money under the pillow. Because it pays no interest there,” says VZ expert Sax. If money is needed in the near future, for example if you are self-employed, a bank account is the best alternative. However, if you can make a long-term investment, you should invest the money in financial investments such as stocks and funds. This pays much more than the interest on the bank account in the long run.

Arrange as widely as possible

Prospects are generally not bad for financial investments. It’s best to position yourself broadly with stocks and bonds, known in technical jargon as diversification. The VZ specialist should follow a simple investment strategy and buy products that he understands and are inexpensive.

Beware of crypto currency

Many hobby investors are toying with the idea of ​​investing in cryptocurrencies to take advantage of future value increases. However, the chief economist at the wealth center refuses. “No, we do not see cryptocurrencies as long-term investments because their value is not stable enough yet,” he says.

Interest rates continue to rise

Will the SNB continue to raise interest rates? “We’ve had most of the journey behind us,” Sax says, but inflation is still above the SNB’s target. “There will be one or two increases from 0.25 percent to 0.75 percent in 2023.” Anyone who prefers savings accounts to stock investments should be happy with it.