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Skip to content When you start investing, you usually ask yourself how you can invest money successfully in the long term. We would like to introduce you to an investment strategy.
An investment strategy helps you to make rational and intelligent decisions when investing. Because when our money is involved, we tend to become irrational. We then often act out of fear or let ourselves be driven by greed and make mistakes - this has been confirmed by numerous studies.
Therefore, today we present you the famous Core Satellite Strategy, with which we have been investing successfully for years. Even large institutions such as investment banks often act according to this strategy.
You will see that the strategy leaves you room for your own investment ideas and still gives you a secure framework for investing.
Sounds exciting? Let's take a closer look at the strategy.
Those who want to invest successfully in the long term usually have two goals:
In the short term, we think this is more like roulette, heavily linked to luck. In the long term, however, it is not!
Because in the long term, share prices rise, for example, because the companies behind them perform profitably. Every day, companies generate revenue by selling innovative products and services.
Share prices are often irrational in the short termbecause we humans are not always rational either. But in the long term, company profits result in lucrative investments. We can invest in these companies and benefit together. When we invest, we provide the companies with money for further developments and in return they give us a share in their profits.
We diversify our investment with the Core Satellite Strategy on many individual companies. Because we don't have a crystal ball and don't know which companies will be successful in the long term and which will not.
Fundamental to successful investing for us is the long-term aspect. In the short term, share prices often fluctuate, but in the long term they move in the direction of rising company values.
As a rule of thumb, we use 5 years: Only invest money that you will not need for the next 5 years. This way you will not be forced to sell investments in bad market phases if you ever need your money. On the contrary - you can then buy cheaply in the "sale". By the way, you help the companies with this, because they receive necessary capital in times of crisis.
For our Core Sattelite strategy, we think long-term, keep fees low and diversify the investment broadly. We build our investment portfolio in 2 areas ...
We want to expose the majority of our investment to little risk (fluctuations on the stock market) and achieve a long-term return as safely as possible. With a small part of our investment we can also invest a little more risky if we want to.
We usually build up the core with ETFs, which invest broadly diversified and favorably in many companies at the same time.
The small satellites we choose wisely and reflect your assessment. They are risky and, conversely, can also yield very lucrative returns.
We build up the majority of our portfolio (approx. 80%) with so-called "passive investments". For example, with ETFs which bundle a large number of equity companies and are available to you at a very low price. We can either do this ourselves or have it done very easily and inexpensively with Roboadvisorn.
The passive core should be very convenient and feasible for you without spending much time. An ETF savings plan or a roboadvisor are best suited for this. The long-term return you can expect here is historically around 7% per year.
Anyone who has diversified the core of their portfolio and built it up with a good risk ratio may still favour high-risk individual investments.
A friend tells you about his lucrative investment in cryptocurrencies or you read on social media about the next Tesla stock? If you enjoy such investments, you can add them to the Core Sattellite strategy. However, it is recommended that the share of active investments (satellites) should not exceed 20% of the total portfolio. You can invest actively with a good Online Broker.
This limitation keeps the overall risk of these investments within bounds. Your crypto investment goes "in the pants"? No problem for your overall portfolio. Your crypto investment brings you 1000% return? Great! But now remember to sell a portion to roughly maintain your 80/20 weighting.
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Interest on the account is virtually non-existent today. At the same time we have inflation, i.e. devaluation of your money. Your money in the account loses value every day.
Only those who invest their money in assets that are stable in value or increase in value can increase their assets in the long term.
The stock markets can also go temporarily into negative territory. If you keep your nerve and simply wait, you can make a profit in the long term.
How much money to invest and where to invest money at all? Never invest money that you will need in the next 5 years. First save up some reserves. Then, when you have money you can spare for a few years, think about your investments.
Return never comes without risk. In the bank account there is (almost) no risk and therefore no return. The stock market can go down -40% and then go up 100% in the same year (see 2020 Corona Crash). Historically, the broad markets have returned an average of about 7% per year.
Either you buy cheap now or you do nothing and just wait. In no case should you sell. Keep your long-term goal in mind and know that after rainy days, the sun will come back.
No, you don't need a lot of time to invest your money. Unless you want to invest a lot of time. But for example, with the above-mentioned Roboadvisorn you set up your investment strategy once and can open a savings plan there, for example, by standing order. Even the tax statement comes with most of the above providers automatically at the end of the year in your mailbox.
Open questions are often answered here on the blog, in the comments section or in our free guidebooks. Please check there first. You have more questions? Then feel free to send us an email.
Those who want to invest their money are well advised to do so in a broadly diversified manner. If you are looking for ideas to invest money, you should be well aware of the risk of individual investments.
Yield is uncertain, fees are not! Every percent of fees must first be recovered. Therefore, pay attention to low total costs, because even a small difference in fees makes an enormous difference over a 20 or 30 year investment period!
Example: 0.5% fees, with a term of 25 years on CHF 6,000 paid annually into the pillar 3a, result in about CHF 11,000 in fees paid. So if someone wants to tell you "1.8% is cheap", think of this example.
Low fees are one thing, but a good investment strategy behind them is absolutely fundamental. Here you can either rely on a roboadvisor or take control yourself.
The proposed Core Satellite strategy is just one of many. We consider a strategy to be absolutely fundamental to long-term success. It allows you to stay true to your set plan even in difficult times and not become irrational.
If you want to invest money, you should think for yourself. How much risk do you want to take? What do you want to invest in and for how long? How much money do you want to invest and what will you do if it goes down?
Anyone building their own investment portfolio needs to be able to answer this. Those who want to go less deep should look at Swiss roboadvisors.
Profit yes, but at what price? Sustainability is an issue for more and more people. Investment and pension schemes are increasingly taking this into account and offering corresponding options. You can invest in sustainability with Selma, True Wealth or Findependent, for example. But the term sustainability is not exactly defined. In the individual reviews, you can learn more about the respective providers. We hope that this article on investing money in Switzerland has already given you a first overview.
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Disclaimer: There is no investment recommendation or advice on Schwiizerfranke.
