The company Investmakler provides readers with accurate and comprehensive information about various investment areas. This article will cover not only large businesses where you can invest your money in Switzerland but also smaller projects. Please note that the material is based on the opinions of our specialists. If you have ideas on how to avoid losses and increase capital — share them in the comments. We would be happy to hear from you!
So, what should you do to start investing in businesses, how to avoid common business mistakes, and how to use available tools correctly? Can you buy an existing brokerage company in Switzerland? Read on in the article.
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Just 10 years ago, it was difficult for citizens of the CIS countries to find reliable and objective information about investing in Swiss enterprises. Many found out the hard way that local insurance companies, banks, and brokerage firms did not want to cooperate with “our kind,” even if they had tons of money. Those who managed to become partners made mistakes, and some, without understanding the legislation, wanted to buy a company with a brokerage license. As a result, both groups ended up failing.
Now there is more trust towards us, and there is a wealth of information online about where to invest in Switzerland and how to do it. But remember: not all of it is reliable. We have created a guide based on facts. It is intended for anyone who wants to start investing and achieve excellent returns.
Our guide will not tell you whether to invest or not. But remember: when it comes to investing money in any business or field, such questions always arise. If you want to take risks and succeed — Switzerland awaits you.
Just ask yourself a few questions:
Why should you answer these questions? Because investing is a very real matter. And you will soon be able to touch, spend, and enjoy the profit.
There have been cases where, due to market fluctuations, a person who invested 100,000 Swiss francs received 70,000 in return the next month.
Once you are sure you want to invest in a Swiss enterprise or register a brokerage (or any other) company, you need to immediately get your affairs in order and understand what you can expect.
What does this mean? You should at least roughly estimate your annual or monthly income. This is done based on the financial documents provided to you.
Get familiar with them, considering the real economy of Switzerland. If you plan to become a Swiss expatriate, do not overlook the “real” cost of living in the country — health insurance, annual taxes, general expenses, language lesson fees (if you do not know the language). Only then can you get a clear picture of the money you need to budget for.
Many investors also want to create a bank account with a deposit. Such a decision will allow you to save for a “rainy day.” This is money to cover a real emergency, such as losing investments.
Also, many investors want to create a bank account with a deposit. Such a decision will allow you to save for a “rainy day.” This is money to cover a real emergency, such as losing investments.
And before you decide where it is best to invest, remember a few other “golden rules”:
As soon as you deal with these factors, you can start looking for a suitable market sector.
As mentioned above, investing is associated with risk. Understanding what you can tolerate is individual. Therefore, it is extremely problematic to give specific advice, only general recommendations.
The level of risk will directly affect the structure of your investment portfolio. In general, the more you invest, the more you will get in return.
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For example, if you decide to invest in the stocks of a brokerage firm, the game will be played over the long term. But even in a stable country like Switzerland, price fluctuations always occur. Therefore, considering a short-term investment, you can quickly lose money.
Remember: the more you risk, the more you will gain. The key is to maintain balance.
Investing in a savings account in a Swiss bank will give you almost zero risk. Your money will always be there, no matter what happens in the world: the state provides you with a kind of guarantee.
But, unfortunately, you will only receive 0.05% per year, while the average inflation rate is 1.2%. You might not notice this immediately, but you will lose money.
Investments in government and corporate stocks constitute a “low-risk” portfolio. They protect the investment from market downturns while ensuring a small profit each year.
Low-risk investing is more suitable for those who want to protect what they already have rather than aggressively increasing returns.
Such investing involves buying 75-100% of the shares. But depending on your financial situation, age, job, savings, and personal circumstances, this risk may be quite low.
A beginner is understandable. But it is still worth determining the possible level of risk. The best Swiss companies, such as Selma Finance, can calculate the possibility of investment and profit for free. They take into account the following factors:
Based on the answers to these questions, choose your investment sector.
Explore all possible areas that could make up your investment portfolio.
Switzerland offers a wide range of options. Here is a brief overview of the options you might encounter.
Buying stocks means owning a small part of the company by acquiring securities.
As the firm grows and succeeds, the value of your share will also increase. By buying stocks, you can make a good profit.
On the other hand, if the firm fails, the profit may become zero, and you may lose everything.
To avoid failure, calculate the risk and indexing regardless of the sector you choose to invest in — whether it is a brokerage, insurance, or any other agency.
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Indexing, by the way, allows you to buy several stocks in hundreds of companies and have a small amount from each of them.
There is such a concept as SMI (Swiss Market Index). It is a coefficient of the Swiss stock market, based on the performance of the 20 largest companies. All of them are open for investment, by the way. Below is a TOP-5:
Nestle, Novartis, Roche, UBS, and others. Here are the top 5, which make up 65% of SMI:
However, for a short-term investment portfolio, SMI should not be considered. You can undoubtedly invest in good companies, but the profit will depend not on the entire market but on the performance of the specific industry you invested in.
What you get from buying stocks:
Avoid the temptation to buy individual stocks — buy a package at once.
Simply put, a bond is a loan. When you buy it, you give your money to the issuer in exchange for a fixed interest rate over a specified period.
Usually, it is an investment in a government or private enterprise. It is safe, stable, and reliable.
Compared to stocks, bonds represent an investment with very low risk.
It is a kind of safety cushion during times of uncertainty and downturns in financial markets. Bonds will also fall in price but not as much as stocks. They will allow you to create a well-balanced portfolio that fully meets investment goals. But the lower the risk, the lower the return, and bonds will never make you rich.
Regarding Switzerland, it should be noted: currently, government bonds are a bad idea. They offer negative interest rates. As soon as you try to withdraw money, fees and taxes will make the return zero. Therefore, instead of government bonds, look for corporate ones.
So, bonds are:
But avoid Swiss bonds that offer negative interest rates.
Buying real estate in Switzerland for rental purposes usually suits those who already have a well-established investment portfolio and high equity. Medium-sized apartments located in the center start from 500,000 Swiss francs.
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We recommend considering local loans. The country has extremely low interest rates on loans. This could help you obtain the necessary amount and make profitable use of real estate purchases.
However, this decision carries significant risks. No bank offers fixed rates. And if the interest rate increases, you will need to cover it.
There are also issues with the real estate itself. In “expensive” houses, you will have to pay for maintenance. Additionally, the valuation of real estate in Switzerland is higher than its actual cost. You will need to pay according to the valuation.
Even after 3 years, you won’t cover all expenses — that’s one. Two — not every bank will want to cooperate with a non-resident.
An alternative to entering the real estate market is purchasing off-plan properties. This is almost the same as stocks but without any risks.
Real estate investment funds (also known as REITs) are widely available.
Overview of real estate investment:
Note that real estate will pay off in at least 5-7 years of constant rental.
Precious metals (gold, silver, platinum, and palladium) have long been considered a “safe haven” when it comes to investing and protecting assets. Gold is a market favorite. You often see its prices soar when the rest of the market falls and uncertainty prevails in the world.
Of course, buying gold is very expensive for most investors. But in Switzerland, it’s surprisingly easy to do. For example, Degussa Goldhandel from Zurich is a market leader offering purchases through an online store.
But keep in mind that gold bars and coins, which you can “touch,” do not yield interest, do not offer dividends, and you will need to pay to insure and store them in a safe. However, there is an alternative. You can do the same as with REITs. For example, buy certificates that yield profits. The income will be about 5% of a long-term deposit. And this is not a domestic business that resembles a “pyramid,” but a reliable investment that truly generates profit.
Description of the precious metals market:
This solution is advantageous and accessible.
ETFs are instruments through which you can invest in various asset classes. These can include stocks, bonds, and real estate as listed above. They usually consist of many companies.
ETFs have become very popular in recent years and are an affordable way to invest. Various brokerage platforms allow you to invest in different businesses. Although it is essentially a trading platform, you can contribute to the financing of corporate firms and earn interest from their activities. The return is more than 10%.
As you understand, investing in Switzerland can involve thousands of potential holdings, companies, and business sectors. But we recommend starting with registering your own company. If this option interests you — contact our consultants. They will be happy to advise you on where to invest money profitably and with high returns, how to open a brokerage company, or buy one.