You also should take into account the different inflation rates in the US and CH. The lower inflation in CH over that timeframe compared to US means that a lower nominal return in CHF is required to achieve the same real return compared to USD.
The US inflation between 1998 and 2012 was ~41% [1] while in Switzerland it was ~11% [2]
Thus your “flat as a pancake” return in CHF might look better in USD, but after taking into account the inflation the real returns should be roughly similar in both currencies.
wanted to add here some more: namely, life happens in between.
In the dotcom-crash I was still at the university, no capital to invest, other problems in life.
I started working full time in 2003, by 2005 I could spare the downpayment of my first apartment, so there goes all my money, plus 150% debt to it.
By the time 2008 came, I was starting to invest in local blue chips (in Hungary), which melted down by -70%, leaving me with nothing but hopium and the big leg wins upwards in 2009-2010 almost brought me to net zero.
By 2010 I was totally pissed in my first crappy apartment and I was eyeing a bigger place with my then-girlfriend together, which happened to fall into our lap as a lucky accident, so we had to buy. Liquidated everything, went all-in for the payment. We were sleeping on 1 mattress without a bed frame for 2 years.
By 2012 I had enough of Central-European cleptocracy and went for the Swiss route with emigration. Capital goes down-down-down in the first 6 months. Then I had to support my partner finding a job (even more drawdown)…
We got “lucky” in the middle that we didn’t get 2 kids in between, financially speaking.
So by the time I had investable money after the 2008 crash was around 2015 and that was only life in between. If we had 2-3 kids as “planned” between 28 and 35, I would still be broke
So it’s easy to say maybe this one crash was unluckily timed, but you’ll do better next time - the next time might be very different, in terms of circumstances. Not everyone stays single and lives with their parents by 40 yo.
Thanks to all for taking the time to answer - some interesting thoughts and ideas.
Quite a few of you were mentioning my ‘fear’ - maybe my OP wasn’t well written. I don’t have a fear of investing and didn’t sell anything. Rather, given this was the first time I was buying stocks like this, after seeing the losses month after month (for the first 3/4 months), I was wondering if I was doing something wrong, and therefore stopped investing. I think the takeaway from a lot of your feedback is to look at the long-term strategy and not be so focused on monthly fluctuations.
I also plan to gradually increase my stock exposure (probably over the next 6/12 months, and probably mainly VT) from the 25% currently up to 60% of my assets.
The question of whether to rent in Switzerland or buy a property is probably a dilemma for another day.
I’m looking into a small windfall (50-80k) to invest short-term (somewhere else than the stock market) for the next 1, max 2 years, and I’m a bit puzzled.
not willing to lump sum VT or DCA VT for the time horizon
looking at real estate (especially Crowdhouse), the previous yields of 6-6.5% evaporated to 3-4% now with some further RE valuation downside risk and “SARON interests moving up”-risk in the next 5 years
looking at crowdlending and corporate bonds with around 7% yield, minus 35% interest tax, doesn’t look very appealing for the risk taken, but the opportunities I see coming are still sold out within hours.
looking at (ZKB) AT1’s - still afraid after the CS “incident”
Is there any platform to secure a ~5% net yield without everything looming above your head?
Or shall I just keep it in cash/obligations in CHF and wait for the eventual stock market crash (that’s never coming)?
I was not asking for a secure yield above SNB interest, but to secure a yield (=options to look at) close to 5% net, besides crowdsourced property investments.
I agree with you. The throw it all in is usually said by very seasoned investors or very naive.
It is not appropriate for most investors who cannot take the psychological stress and risk is also not suitable.
And the worst outcome is not that they just take a hit on their investments, panic and sell at a loss, but that the whole bad experience puts them off investing for a long time.
Actually, given the high valuations, the long easy bull markets of the last few years and the potential challenges ahead, we could be in for a huge drop which gets worse as newer investors face fear for the first time and panic sell en masse.
For a nervous and new investor, I’d probably go with investing in very short term T-bills. You get paid 5% and you can gradually drip feed into stocks as confidence grows.
Ah. I just joined the forum. Back in April I would have told you to stick it in NVDA I guess now you could put it in T-bills and get over 5% and take the FX risk on top.
I understand you are from finance/investment world, thus two questions on your T-Bills suggestion:
Why do you suggest USD product? Some say USD might continue depreciate vs CHF. I personally think SNB would never allow CHF to be too strong (eg 1.3 and above) against USD due to export, etc. Would you second that?
Are T-Bills issues at discount tax free as per CH law? Seems so, but still not 100% sure.
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