Investing money in Switzerland: investment strategies and the 1×1 of investing

There are many convincing reasons to look into the possibilities of investing money. These include exciting travel destinations, a good education for the children and, above all, being able to look to the financial future without worries. But an efficient investment strategy has to be learned.

Use this article to find out about the main investment solutions and learn about their characteristics, opportunities and risks.

The most important facts in brief

• An investment strategy sets how assets are spread across asset classes and thereby determines how strongly they fluctuate.
• Diversification can reduce risks.
• Investing regularly spreads the entry point over time; a loss remains possible.
• Digitisation makes wealth management accessible to broad segments of the population.

Investing money in Switzerland: an overview of investment forms

When choosing a form of investment, the question is less one of good versus bad. The forms differ in investment horizon, volatility, costs and liquidity. To compare them, it helps to know the main forms of investment.

1. Call money and time deposit

Overnight money is a flexible investment that complements your checking account. In a call money account, you deposit money that you would like to have at your disposal at any time. However, with the start of the low-interest phase, many banks have discontinued their offers for call money. While offers are now on the rise again in other European countries, they are limited in Switzerland and there is currently hardly any interest worth mentioning. In addition, offers for call money tend to appeal to well-off investors because of the high minimum amounts that are often required.

While the interest rate on overnight deposits can change at any time, the interest rate on time deposits is guaranteed during the term of the deposit. Time deposits, also known as term money, are therefore suitable as an investment for funds that you only need in the medium term. In Switzerland, time deposits are usually offered with terms of 3 to 24 months. Security and the ability to plan are the main features of this type of investment. However, you cannot currently expect more than one percent interest for this investment. Therefore, it is not suitable as an investment for long-term wealth accumulation.

2. Bonds

Bonds are issued by companies or governments as a source of financing and are usually rather low-risk investments for investors in comparison. They belong to the group of fixed-interest securities. The issuer undertakes to pay out the capital plus the agreed interest at maturity. In Switzerland, private investors often invest in so-called medium-term notes. The issuers are the public sector and credit institutions. Medium-term notes are offered with maturities of up to ten years. So if you only need or want to get your invested money back within the next ten years, bonds are a possible form of investment.

3. Shares

By investing in shares, you become a direct shareholder in a company. As a shareholder, you share in the profits of the company. This share is paid out as a dividend. Shares can generate income through dividends and price gains. Neither is guaranteed, and price losses are possible.

Investing in individual shares requires not only a sound know-how but also an enormous time commitment. You should have sufficient knowledge of the markets in which you invest. In addition, stock market trading requires sound research as well as an assessment of company key figures.

Equity investments fluctuate in value, and short-term losses on individual stocks do occur. Basically, the more specialised and narrow the markets are, the higher the risk. In this respect, the strategy must distinguish between short-term price opportunities and long-term investments in established companies with possible regular dividend payments.

Reading-Tip: Investment Strategy in Focus: The Power of Income Strategy

4. Funds

Fund companies invest the money paid in by investors in various securities from different markets. The assets represent a so-called special asset, which is held in trust at a bank. This means that they are managed separately from the company’s assets and are therefore protected in the event of the fund company’s insolvency. Fund units can be returned to the fund company at the current price. When purchased, there is usually an issue surcharge and the fund company takes an annual management fee for its management.

Each fund invests in defined target markets. These can be, for example, global companies, high-opportunity companies in emerging markets or companies in the healthcare sector. This gives you the option of investing primarily in certain markets or diversifying your investment worldwide.

For long-term asset accumulation, fund savings plans with fixed monthly installments are suitable. This allows you to take advantage of the cost-average effect: when prices are low, you buy a higher number of units, and when prices are high, you buy a lower number.

Compared to investing in individual shares, there are the following advantages in particular:

• With a fund share, you invest in a large number of companies at the same time.
• The fund management takes care of buying and selling the individual securities.
• Risk diversification is made much easier with a fund.
• With fund savings plans, you save regularly and invest in the capital market for the long term.

Investing in funds is also a long-term investment. When making comparisons, therefore, pay primary attention to long-term performance.

5. ETFs

The principle of ETFs is initially the same as that of a “normal fund”. The main difference is that ETFs are not actively managed. Simply put, an ETF copies the composition of an index. This saves costs, which has made ETFs very popular in recent years.

An ETF on the MSCI World Index tracks large and medium-sized companies from developed markets. The index comprises around 1,300 stocks from over 20 countries. Emerging markets and small companies are not included.

In a long-term comparison, investors have generated positive returns in recent decades with a broad-based ETF such as the MSCI World, but have also had to accept significant price declines along the way.

6. Real Estate

Until the turnaround in interest rates in 2022/23, low rates led investors to look increasingly for alternatives to safe savings investments, including real estate, and many buyers took on high levels of debt.

Real estate is also considered quite crisis-proof in Switzerland, especially in the preferred locations. However, this has caused real estate prices to literally skyrocket. The home ownership rate in Switzerland is therefore low, at around 35 percent, even by international standards.

If you invest in an owner-occupied home, you are protected against rent increases and terminations. This value will benefit you in retirement in the form of saved rent. If you purchase a property in order to rent it out, you will generate rental income in retirement and thus additional income, provided the debts for the property have been repaid.

The investment in land is considered solid and safe. Nevertheless, the term itself expresses that it is not a flexible investment - it is “immobile”. That means real estate is a way to diversify your portfolio. However, keep in mind that your life plans may change and also, for example, a change of location for professional reasons may make sense. In addition, initially, due to the high real estate prices in Switzerland, a high equity investment is required. The Swiss real estate market responds to the interest-rate policy of the Swiss National Bank (SNB): after the rate turnaround of 2022/23 and the renewed rate cut in 2025 (policy rate at 0 percent), prices remain dynamic. You should therefore not rely on consistently high annual price increases, as seen in individual years.

7. Precious Metals (Gold & co.)

Gold, silver, platinum and other precious metals are not only among the oldest forms of investment. They are also considered a crisis-proof investment. At the outbreak of the pandemic, the price of a troy ounce of gold therefore rose to over 2,000 dollars by the summer of 2020. But the stock market recovered from its slump quickly thereafter. At the same time, the price of gold fell again to around 1,700 dollars at the end of 2020. Since then it has risen sharply, reaching new all-time highs of over 4,000 dollars per troy ounce (as of 2026).

Experience shows that precious metals generate no ongoing income. Their price can also fluctuate strongly, even though they are often regarded as safe. In a portfolio, precious metals usually serve as a small addition for diversification.

8. Cryptocurrencies

In addition to Bitcoin, the first and largest cryptocurrency, there are now a large number of digital currencies worldwide. They are based on blockchain technology and, compared to conventional currencies, therefore only exist as data within a global computer network. For private investors, these investments represent an extremely speculative investment alternative.

The cryptocurrency Bitcoin has been around for over 10 years. Nevertheless, cryptocurrencies are not officially recognised currencies. For digital money, you first need a digital wallet. Trading is then done on one of the crypto exchanges.

The risk of cryptocurrencies is enormous, because no government guarantees the value of cryptocurrencies. Currently, cryptocurrencies can therefore not be classified as a safe investment and are not suitable for retirement planning.

If you are interested in cryptocurrencies despite the high risks, consider the following points:

• The prices of cryptocurrencies are very volatile. Exclusively supply and demand determine the price.
• New and small cryptocurrencies are particularly risky, as they may not continue due to lack of capital.
• Since cryptocurrencies are not regulated, there is no overarching supervision. Thus, there is a lack of any investor protection, such as deposit insurance.
• Countries sometimes react with reservations towards digital currencies. In China, for example, crypto trading is prohibited. The European Central Bank is considering its own digital currency, which would weaken the other cryptocurrencies.

9. Foreign Currency

Trading in currencies (foreign exchange trading) is highly speculative - exchange rates can fluctuate enormously. In addition to direct foreign exchange trading, foreign currency accounts are also offered for investments such as time deposits or bonds. Please note that you bear a double risk. In addition to the issuer risk, there is also the exchange rate risk. This means that even small fluctuations in exchange rates can wipe out interest rate advantages. In addition, foreign currency bonds are often only traded on the stock exchange to a limited extent, which can mean unfavorable prices when sold.

The price development of currencies depends in particular on the following factors within the respective country:

• economic stability
• political stability
• risk of inflation
• national debt

10. Private Markets

Private markets are investments that are not traded on a stock exchange, i.e. are not publicly available.

They are as follows:

• Private Equity: investments in unlisted companies.
• Private Debt: unlisted debt securities.
• Private Infrastructure: Investments in infrastructure assets such as water supply, waste disposal, bridges or hospitals.
• Private Equity Real Estate: Investments in real estate in all sectors.

Private Markets has long been the preserve of institutional investors, but has now grown in importance among high net worth private investors. It involves risk capital. The high potential returns are offset by the risk of total loss. Therefore, the investment form serves as an admixture to optimise returns for very large assets.

11. Invest money through wealth managers

It is no longer necessary to be a millionaire to invest your money professionally. Digitisation and the use of funds and exchange-traded funds (ETFs) are opening up wealth management solutions to a broad public. Finally, investing money profitably requires time, which is not sufficiently available to everyone.

Nowadays, it is possible for everyone to make use of professional wealth management. Depending on the provider, you can start with an amount of about 30,000 francs. Fees have also become affordable for asset managers with a digital approach.

Professional wealth managers start with the analysis

A wealth management mandate sets the investment strategy in writing before the mandate begins. The basis is risk capacity, risk appetite and investment horizon, which the wealth manager records.

Typical investment strategies include:

• conservative(low share of equities, low risk of loss, lower return prospects)
• balanced(medium share of equities and medium risk)
• aggressive(higher share of equities, higher return prospects, higher risk)

In practice, you may find further, finer gradations.

Investing Money Efficiently: How to Find Your Personal Investment Strategy

Your investment strategy is how you divide your assets between equities, bonds, real estate and cash. That split determines how much your portfolio fluctuates and how much return potential it offers. A strategy only works if you stick with it, so choose one you can hold through different market cycles. The following sections will help you find your investment strategy.

Portfolio theory: Spreading assets - optimising return and risk

If you have studied investment strategies a bit more intensively, you have already come across the hint that you should diversify your assets. But what does diversify mean and what mix makes sense?

Since its publication in 1952, the portfolio theory of the US economist Harry Max Markowitz has become one of the most successful and important theories of capital market theory. Its central concept is risk diversification, with which the composition offering the highest expected return can be determined for a given level of risk. “Expected” means calculated from assumptions, not promised.

Diversification means spreading one’s portfolio across multiple asset classes to reduce dependence on any one investment. A well-diversified portfolio can help investors limit their risk while taking advantage of potential gains.

Key points in asset diversification are:

• Assets are divided into different asset classes.
• The asset classes should have different potential returns and risks (including equities and bonds).
• Within the asset classes, the selection of individual stocks leads to an optimisation of the risk-return ratio(such as global equities and emerging market equities).

Broader diversification reduces dependence on individual securities, while market risk remains. Diversification does not automatically increase returns, and losses remain possible.

Diversification depends on the amount of capital invested

The smaller the investment, the less diversification usually comes into play for the investor.

With 1,000 francs, you can only invest directly in a few asset classes. ETFs and funds bundle many securities in a diversified portfolio and are therefore accessible even for small amounts.

If more than 10,000 francs are invested, a loss - depending on your financial status - can be quite painful. If you put all your money into a single investment, you cannot rely on capital preservation and it can be difficult to recoup the loss through future returns. That’s why it’s hugely important to plan your portfolio carefully.

Bonds, precious metals or real estate are considered to be safer forms of investment, but they also carry risks: bonds carry default and interest-rate risk, precious metals are subject to price fluctuations, and real estate ties up capital.

Forms of investment and investment strategy

An investment strategy sets how assets are spread across asset classes. There is no single right strategy: the forms of investment differ in investment horizon, range of fluctuation, costs and liquidity.

Investment fees

Fees come at the expense of returns. Therefore, it is important to compare the fees of different providers. Nevertheless, you should always consider the service you receive for charged fees. For example, active asset management can pay off in the long run. After all, as a private investor, you usually have neither the know-how nor the time required to make sound investment decisions on a daily basis.

The main fees that occur as part of your investment are:

• Fees for buying and selling: most financial products have a transaction fee. Fees are incurred on securities transactions on the part of the exchange and the contracted bank.
• Custodial fees: Banks charge custody fees for holding securities in a securities account. Online brokers offer lower fees.
• Issue surcharge for funds: The surcharge is calculated on the purchase of investment funds. It can amount to up to five percent of the purchase price.
• Administration fees: Administration or management fees are usually calculated as an annual percentage. It is important to pay attention to what this fee is for and what it includes. For actively managed funds, the fee is for fund management, which is research and professional trading.
• Follow-up fees: sometimes fees are charged for changes to the investment product or risk profile. So pay attention to what potential follow-up costs are associated with a particular investment.

Early start expands investment opportunities

With compound interest, earnings themselves earn returns. If they are positive, assets grow disproportionately over the investment period; if they are negative, the effect works in reverse.

Even over a long investment horizon, a loss remains possible.

The Swiss Market Index started on 30 June 1988 at 1,500 points. Its 2007 high was not exceeded until 5 January 2018, when it closed at 9,558 points (source: SIX). The financial crisis and further price declines occurred in between. This observation describes the past and is no guarantee of future developments.

Investing regularly

Experience shows: regular investing beats hectic trading. In any case, it is hardly possible to determine exactly the right time to buy or sell every security. Saving instead of waiting is therefore the motto.

In the case of fund savings plans, the cost-average effect also shows how advantageous regular saving can be: If you invest a fixed amount each month, a higher number of units will be bought when prices are low and a lower number when prices are high.

Patience and the course of the market: Learning to invest

The more time you have until retirement, the easier it is to practise patience to set yourself up for long-term success. The stock market provided an impressive example of this in the 2020 corona year. When the pandemic broke out in the spring, the capital markets collapsed and double-digit price losses were the order of the day. But by the end of the year, the barometer had largely returned to pre-pandemic prices. Markets move in waves. Economic growth can support prices in the long term, but it does not mean that prices will rise.

Recognising unprofitable loss leaders

Excessive returns can generally only be achieved with increased risk. Therefore, compare the possible returns of an asset class with the offer you are presented with. For example, if yields of two percent are common for time deposits with a certain term, you should become critical of an offer with five percent interest. Either the offer comes from an unsound provider or the economic framework data of the issuer or the country from which the offer originates are desolate.

Investment horizon and stage of life

As life stages change, so does the investment horizon, and the characteristics of an investment that matter change with it. There is no fixed rule matching products or equity allocations to an age.

Long investment horizon

At the start of working life, many years remain to sit out price fluctuations and recoup losses. There is no guarantee that losses will be recouped, and securities can keep fluctuating even after many years.

Medium investment horizon

The closer fixed goals such as repaying a mortgage or buying a car come, the more important the availability of the capital becomes. Call money is available at any time, fixed-term deposits at the end of the term. Securities fluctuate in value.

Short investment horizon

The shorter the investment horizon, the less time remains to recoup losses. Investments with lower fluctuation are generally also associated with lower return prospects.

Opportunities in Switzerland’s three-pillar system

In addition to the first pillar for state subsistence and the second pillar for occupational pension provision, the third pillar is the part where you largely choose the level of contributions and the type of solution yourself.

Pillar 3a: You enjoy tax advantages within the maximum amounts for the payments into the private pension plan of pillar 3a. Pillar 3a retirement planning is typically implemented with solutions such as life insurance, retirement accounts and retirement savings accounts. This is possible via a bank foundation or via insurance provision with a Swiss insurance company.

Pillar 3b: Pillar 3b is the free pension scheme: it is not bound by the rules of pillar 3a, but is subject to the general tax and insurance law rules. Unlike pillar 3a, the contributions do not have a direct tax effect. Unlike pensions from pillar 3a, which are fully taxed, those from the free 3b pension plan are now taxed only on a reduced, interest-rate-dependent income share (a change introduced in 2025; previously a flat 40 percent).

Reading tip: Switzerland’s 3-pillar principle

Frequently asked questions (FAQ)

What is meant by the term “magic triangle”?

The magic triangle illustrates the balance between the three investment objectives of security, return and availability. The three investment objectives depend on each other and relate to each other in a certain way.

There is no investment form that satisfies all three desires. You must weigh which factors are most important to you.

Which investment will give me the best return?

Unfortunately, even the best experts cannot look into the future, but they can look into the past. Equities offer a higher return potential than bonds or savings accounts, but also increased risk.

You will have to accept short-term losses when investing in stocks. Historically, equities have generally delivered higher returns than bonds and savings accounts over long periods, with considerably larger fluctuations. This observation describes the past and is no promise of future returns.

What basic mistakes should be avoided when investing money?

• Timing and market analysis replace investing money regularly: Investing regularly spreads the entry point over time.
• Putting all your eggs in one basket: Think diversification when saving as well as investing.
• Accept high costs: Digitisation has led to interesting and at the same time low-cost offers.
• Extrapolate performance from the past: Markets can change.
• Constant buying and selling: Stay true to your strategy and don’t pay unnecessary fees for frequent switches.

What role does inflation play in investing?

The average return on investments should be above the rate of inflation. If the return is lower, the purchasing power of the assets declines.

How high should the proportion of liquidity be when investing money?

Liquid investments should be a reserve for expenses that cannot be met from regular income. There is no fixed ratio.