OK, so not comparing prices but percentage difference to previous value? Are you certain that is the right way to do it?
I think so. Because otherwise everything will have high correlation because price charts normally go up for most assets. And your objective is to understand if during a certain period they move in different directions or not.
Watch this
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The index however assumed worst possible withhding tax. That will offset TER and a bit more even.
In general about 4-5% real return is realistic.
True
For a 2% dividend yield
- WHT advantage would be about 0.30% (assuming Treaty rate of 15% vs 30% WHT in Index)
- Income tax disadvantage on 2% dividend is going to be 0.60% (assuming 30% marginal tax rate)
- TER lets say 0.1%
- So post tax net return would be about 0.4% lower than the charts
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Valuable stuff, cheers @Abs_max
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Thanks, just calculated correlation of SPI and SWIIT from 1995 to today according to the video you linked and got a correlation of 0.3.
What I as a non-mathemagician donât get is why the formula for the return is LN(today/yesterday) and not (today/yesterday)-1.
Actually i didnt use the LN function because i was not sure what it was. But I simply used the change from one quarter to another.
So now that you have established that SPI & SWIIT have low correlation but also a positive one, does SWIIT fit in your portfolio?
For the period of the last 10 years, correlation has increased to 0.45, but still. (Gold has -0.02 for 1987 to today and 0.00 for the last 10 years BTW).
I will most likely start to add some SWIIT SWIIT real estate to my portfolio.
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7 posts were merged into an existing topic: Buying gold Vs staying with CHF
(Source)
OK. So we should be on our way back down now.
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Source: Ritholtz Wealth Management via Twitter
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(via https://x.com/RobinWigg/status/1984201317846323575)
Look at how steady the US and CH are for those top earners!
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Probably doesnât help that the GBP has fallen in value and government policies are effectively chasing away the remaining HNWI.
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interesting fact I noticed: The top 10 are all (majority) germanic language speaking countries.
I also did not expect Germany to be that high, especially after tax 
An even climbing a lot considering Germanyâs (not existant) economic development and increasing taxes.
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From todayâs NZZ (article, paywalled):
Nimmt man nun die vollstĂ€ndige Zeitreihe seit 1836, so prĂ€sentiert sich der Franken als Gewinner. Will heissen: Auf sehr lange Frist war die Schweizer WĂ€hrung stĂ€rker als Gold. Die Wertzunahme des Sparbuchs ist ĂŒber diese Periode beinahe zehnmal so gross.
Analysiert man die Daten indes genauer, so zeigt sich, dass der Franken seinen Vorsprung primÀr der Entwicklung im 19. Jahrhundert verdankt. Denn damals fiel der Zinsertrag höher aus. Je nÀher man aber zur Gegenwart kommt, desto geringer werden diese Zinsen und desto flacher wird die Kurve in der Grafik.
Cited source: Costa Vayenas: The Swiss Franc 1798â2055. Vayenas Publishing, Brugg 2025.
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The gold boom reflects a loss of confidence in currencies. At best, only the Swiss franc can outperform the precious metal. But it is doing so less and less over time.
âA franc is a franc,â as the saying goes in Switzerland. Behind the sentence lies the confidence that no other currency can compete with the franc. The track record is indeed impressive. Even the dollar as the global reserve currency is effortlessly overshadowed by the francâs performance.This is now also documented by the longest historical time series on the dollar-franc exchange rate to date. It was published by economist Costa Vayenas, who works as Chief Investment Officer at asset manager Genesis and teaches at the University of Zurich. The data presented in his new book dates back to 1798, the founding year of the Helvetic Republic. The exchange rates of the first decades are not archived in Switzerland, but in Paris.
However, the franc did not achieve its position as the worldâs hardest currency overnight. As the chart shows, the exchange rate initially moved within a narrow range. Only for a short period, during the American Civil War from 1861 to 1865, did the dollar temporarily plummet by half. Apart from that, there were hardly any fluctuations: If the dollar cost 5.17 francs in 1801, it was still exactly the same amount over a hundred years later, in 1932.
âFrom the data, we can see that the franc was already an amazingly stable currency in the early days,â says Vayenas. âThis alone is an impressive achievement, considering that sovereignty over coinage initially lay with the individual cantons.â Therefore, there was a jumble of local coins such as ducats, talers, rappen or batzen during this time.
What promoted stability: Initially, the franc was a pure metal currency. âIn contrast to the USA or Great Britain, Switzerland initially refrained from printing banknotes,â explains Vayenas. This made it more difficult for the state to pursue an inflationary policy and put additional money into circulation.
Only with the introduction of the Federal Constitution in 1848 did the competence for the currency pass to the Confederation â whereby a dispute immediately broke out: French-speaking Switzerland, Bern and Basel wanted Switzerland to orient itself towards the French franc. The defeated faction, on the other hand, would have preferred the South German gulden.
In 1865, Switzerland joined the Latin Monetary Union led by France. This practiced a fixed link to the price of gold and, initially, also to the price of silver. As a result, a large number of gold and silver coins from France, Belgium, Italy and Greece circulated in Switzerland as official means of payment. The First World War ultimately led to the collapse of the monetary union.
The Dollar Loses Importance
Shortly thereafter, with the Great Depression, the francâs rise began. If you paid 5.17 francs for a dollar in 1932, the rate fell to 3.08 just one year later â a minus of 40 percent. The trend was thus set.
Although the gold-backed monetary order after the Second World War temporarily ensured more stable conditions: The Bretton Woods Agreement elevated the dollar to the global anchor currency. The USA agreed fixed exchange rates with its trading partners and guaranteed that they could exchange their dollar holdings for gold at a fixed price.
However, because the USA accumulated an ever-increasing deficit in its trade balance, confidence in the dollar eroded. In 1971, the country had to abandon the gold backing of its currency, whereupon the dollar collapsed dramatically. Since then, the exchange rate has fallen from 4.32 francs to 80 Rappen, which corresponds to an annual loss of 3.3 percent. Most of the decline occurred in waves, and the minus has reached over 10 percent in the current year as well.
âThe franc owes its strength primarily to the outstanding financial stability of Switzerland and the low debt burden,â says Vayenas. The country has also been fortunate not to have been drawn into any wars. âThe fact that the currency was always backed by high gold reserves also contributed to its credibility.â Until 1999, gold backing was even enshrined in the Federal Constitution.
Gold Backing Was Prohibited
As Vayenas writes in his book, Switzerland was thus in a certain contradiction to the International Monetary Fund (IMF). After the end of the Bretton Woods system, the IMF forbade its members from linking their own currency to the price of gold. However, Switzerland was able to convince the IMF that it was not operating an explicit gold peg. In 1999, for example, the banknotes and coins in circulation were 97 percent backed by gold.
Although central banks have abolished their gold redemption obligation: Nevertheless, the precious metal has retained its status as a benchmark for the value of a currency. Recently, its importance has even increased. The reason lies in the strong increase in government debt and in the fear that this could increasingly lead to inflation and currency devaluation.
[Image: Gold in the vault of the Swiss National Bank: The franc also owes its status as the worldâs hardest currency to Switzerlandâs large gold reserves.]
Martin Ruetschi / KeystoneBut what is more value-stable in the long term: the franc, as the hardest currency in the world, or gold? The currency actually speaks in favor of the fact that it yields interest â unless you store the cash under the mattress. Gold, on the other hand, does not generate any income.
Costa Vayenas also provides insightful answers to this question with the longest time series published to date. Specifically, he has compared the price development of gold since 1836 with savings in francs. For the franc, it is assumed that the savings were invested in the short-term money market, which is roughly equivalent to a savings account. The investor therefore earns interest, but remains liquid and can withdraw the money immediately if needed. Because this is a model calculation, Vayenas has not taken the tax burden on the interest income into account in the calculation.
If you now take the complete time series since 1836, the franc presents itself as the winner. In other words: In the very long term, the Swiss currency was stronger than gold. The increase in value of the savings account is almost ten times as large over this period.
However, if you analyze the data more closely, it shows that the franc primarily owes its lead to the development in the 19th century. Because at that time the interest income was higher. But the closer you get to the present, the lower these interest rates become and the flatter the curve becomes in the chart.
In terms of value development over the last hundred years, the franc and gold have mostly been neck and neck. In the last two decades, however, the result has tipped in favor of the precious metal, which is now significantly better off. If you start the comparison after the collapse of the Bretton Woods Agreement of 1971, gold is also the clear winner. Only for a short period, at the end of the 1990s, were the franc and gold on par.
âThe franc remains by far the most solid currency in the world,â Vayenas summarizes his analysis. âHowever, the price increase in gold, which has recently accelerated, testifies to a growing loss of confidence in currencies in general. People doubt their value.â
In this context, it is piquant that Switzerland decided to sell off more than half of its gold reserves at the end of the 1990s. The timing fell just at the end of a 20-year gold bear market, during which the price had fallen by two-thirds. Since then, however, the price has increased eightfold. The 1550 tons of gold sold in the years 2000 to 2009 brought Switzerland proceeds of almost 30 billion francs. Today, this stock would have a value of 150 billion.
Although the sale did not pay off in retrospect: Vayenas can understand the decision from the perspective of that time. âThere were widespread doubts as to whether gold would continue to retain its function as a store of value in the future, which was reflected in the long-term price decline.â
Sought-After Protection Against Inflation
Instead, gold has experienced a brilliant comeback. Even a number of central banks are replenishing their reserves, namely in China, Poland, India or Turkey. One factor is the desire to reduce dependence on the dollar. The Swiss franc is also in demand as a âsafe havenâ. âMany investors want to hedge against the scenario of persistent inflation,â says Vayenas. In addition to real assets such as stocks, gold or real estate, currencies that are subject to only a slight devaluation are therefore also sought after.
The extremely low interest rate level in Switzerland shows how high a price investors pay for this security: Buyers of a ten-year government bond are currently satisfied with a meager interest rate of 0.1 percent per year. In contrast, the American state must pay its creditors an interest rate of 4.1 percent for a ten-year government bond. Buyers only accept such a large interest rate difference if they expect a further devaluation of the dollar.
The franc is therefore unlikely to lose its status as the strongest currency in the world. The real test, however, is how well the Swiss currency can hold its own against gold in the future. This is also a sign of how much confidence investors still have in currencies as a whole.
I think it makes sense to compare only after gold-backing for the Franc was removed (until then, you could argue the Franc was a gold depository receipt).
Iâm looking to put spare cash into gold and CHF, though both have risks. SNB are considering negative rates again and the value of the Franc has extra uncertainty with US trade disputes. Gold has already had a massive run up.
You pick your poison.
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Does anyone know where to find total return data for either the Nikkei index or MSCI Japan going back to at least 1990, preferably to 1980? I spent the last 2 hours, supported by Claude and ChatGPT, to no avail.