Last update: 23.02.2018 12:11
There are many ways to profit from the financial market.
They all start with the fact that you have to start investing.
Due to the many offers, this is not easy, but with a few considerations it is not that difficult.
So, let’s get started right away.
Smart investing starts with having a handle on your pension provision and thinking about how much money you can put aside – and for what.
But even without a specific savings goal, you can start putting something aside.
Here is an example of how you can get a lot out of even small amounts because you benefit from the compound interest effect.
The longer you invest, the greater the effect.
Let’s assume you invest CHF 150 per month at an interest rate of 3%.
After 10 years, you will have CHF 21,000, CHF 3,000 of which is interest alone.
Here are two more examples:
Monthly savings amount: CHF 300
Interest rate: 3%
Result in 7 years: CHF 28,000
of which interest: CHF 3,000
Annual savings amount: CHF 2,500
Interest rate: 3%
Result in 5 years: CHF 16,000
of which interest: CHF 1,500
To benefit from compound interest, you need products that generate good returns.
Unfortunately, savings accounts with interest rates of up to 1% are no longer one of them.
On the financial market, you can expect a return of 3-5% per year in the long term – depending on which products you buy.
And you already know that higher returns always mean less security, i.e. more risk.
Here is an example of an ETF that focuses on the 30 largest exchange-traded companies in Switzerland.
Source: justetf.com
In the last 3 years, you would have generated a return of over 11% with this investment and would therefore be well on average.
However, to buy investment products such as funds, the first thing you need is a custody account.
You can find out how to open one here step by step.
Once you have a custody account, you can buy and sell investment products (such as individual securities, actively or passively managed funds, etc.), have them held in custody and keep up to date with their performance.
Most providers also offer you convenient online options for your smartphone.
Don’t let the daily ups and downs of prices drive you crazy – it’s best not to look too often.
We therefore recommend a long-term investment strategy that takes into account your risk capacity and risk appetite.
You select one or more funds, regularly buy additional units over a longer period of time and hold the funds for a longer period of time.
Longer here means 7-10 years.
You then simply sit out short-term fluctuations in value.
Don’t have a custody account yet? This guide will show you how to select and open a suitable custody account.
