The Swiss Market Index (SMI) lost 17 percent last year. The worst performance since 2008, when the real estate bubble burst and the financial crisis began.
“NZZ” refers to the “black year of the stock market”. The Frankfurter Allgemeine believes that 2023 can’t get any worse, while the Tamedia newspapers state that the year ended “mostly brought losses” to investors.
Black year of the stock market? Who do business journalists write for? Probably for CFOs, asset managers or pension fund managers. Losses in the stock market can really worry you. Your actions will be measured by efficiency. Those investment advisers who recommended buying securities at the beginning of the year, despite the gathering clouds and record high prices, also have nothing to smile about.
On the other hand, for private investors, comparing calendar year numbers doesn’t make much sense. Therefore, do not be afraid of gloomy words. There is even a good side to accounting losses: lower taxes on wealth and the ability to purchase securities at lower prices if one could take advantage of falling prices.
So let’s see what it means for private investors if the most important stock market barometer for Swiss equities is down 17 percent in a calendar year. Firstly, for everyone it means something different – depending on the composition of the portfolio. Anyone who also holds foreign publications in their portfolio is likely to suffer even greater losses, also due to a weaker euro. Note: Count losses, not losses.
Gopfried Stutz is based on the Ishare Swiss dividend. This is not the first time a fund investing in Swiss stocks with above-average dividends has been mentioned here. His largest positions are with Zurich Insurance, Novartis, ABB, Nestlé and Roche.
At the end of 2021, the share of this fund was worth 163.90 francs, at the end of 2022 – 142 francs. The fund lost a good 13 percent. But now Ishare Swiss Dividend has paid out a generous dividend in what it calls “the year of the stock market”, namely 4.94 Swiss francs per share. Compared to the price at the beginning of 2022, this gives a dividend yield of at least three percent.
But those three percent don’t really matter. It is estimated that 99% of investors did not buy shares at the beginning of 2022. You bought them somewhere a few years ago, or maybe last summer after a course correction.
For example: At the end of 2018, a share in the aforementioned dividend fund was worth CHF 103.50. Based on this indicator, the dividend yield for last year was 4.77 percent. Not a bad value for a black year stock market.