Three Swiss stocks for eternity

Investing / Portfolios
1

Hello folks

I’m a bit older and would like to slowly take some risk out of my 100% equity portfolio.

I am not convinced by bonds. Instead, I’m thinking of selecting three Swiss stocks for the ‘fixed income’ portion (3x10% of portfolio, 70% would be FWRA). They should have first and foremost strong defensive qualities. Stable dividends that are not too high for tax reasons would be a plus.

So, which three Swiss ‘bond-like’ stocks for eternity would you choose to bring stability to your portfolio - and why?

I look forward to your ideas!
L.A.

3

Why only 3? Take 3% from each of the top 10 here:

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4

How does your current portfolio look like? Because, if it is 100% FWRA, you are definitely better diversified and have lower risks instead having suddenly 30% of the portfolio in three Swiss stocks.

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5

Stocks are stocks, I would not be confident using single stocks as a bond position. The only one I could consider would be SNB stocks and it has lower returns than most other things out there.

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Zurich Insurance, Swisscom and Novartis.

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7

There are no “bond-like” stocks and there never will be.

Stocks are inherently risky.

Others already chimed into the concentration risk you are creating with your intention. Any company can fail, ANY. You dont want 10% of your wealth tied up in one single company.

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Cheese, Chocolate and Watches. You are welcome.

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9

Older and de-risk? Keep investing/saving as usual, sell ammount-x of what you want to derisk from portfolio and do extra payment to 2nd pillar (assuming you still can). Income tax offset, ‘derisk’, sleep better at night.

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There’s no such thing.

If you want to de-risk without bonds, increase your home bias by buying a Swiss ETF based on a Swiss index.

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Since you asked for specific companies, Swisscom (government ownership, infrastructure, recurring revenue) and Galenica (largest network of pharmacies in CH, logistics) would be two names to take a closer look at. Problem with defensive companies is that their dividends tend to be higher than average.
I agree with the other comments that you should diversify more, 3 stocks is insufficient.

If you are looking for some (limited) equity upside with bond like protection, structured products (capital protection) may be worth a look, but you should be aware of what you are doing & risks.

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Not fully convinced of Novartis. How about ABB or Givaudan instead?

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Calida, so you get also a free PJ every year.
:smiley:

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Is this the passive income everybody is talking about?

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ABB is a growth company in my books, only reason I haven’t bought it is because I want to avoid the slippery slope and stress of stock picking.

But it’s a very robust company with - I think - a great future.

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agree that ABB was more growth - I just don’t see these many, stable, boring shares in Switzerland (other than Swisscom and Zurich). Besides - ABB is loads of quality and less cyclical than it was in the past :slight_smile:

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It’s p/e is pretty high but this could be the new meta. A friend who’s an engineer is actually trying to get a job there, says it’s well-positioned to make it big with AI and has a very robust core business and competence.

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This!

I’m really not sure why there is an actual discussion about which stock to choose. :face_with_diagonal_mouth:

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In reality no stock is like bonds. Because bond has fixed return and stock doesn’t. No company is “safe” in long term or a forever stock

But if you are trying to use Swiss stocks for fixed income replacement, then perhaps look into SPI index. It would be more diversified.

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21

Speaking of Swiss stocks for eternity, it is my understanding that many Swiss dividend payers took a big cut in 2002 as they had to cut dividends and got a big fall in value (partially as a result, I would guess), including staples like ZURN (dividends went from CHF 17.15/share in 2001 to CHF 8/share in 2002 to CHF 1/share in 2003 / and adjusted share price went from 231.66 in 2001 to CHF 63.32 in 2003.

Price chart from SIX:

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Dividend and price history from Digrin (no idea how reliable the site is, I was just searching for a dividend history going further than 10 years): ZURICH INSURANCE N dividends | Digrin

Dividends may be stable most of the time but when they break, they take the price of the share with them.

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We probably shouldnt focus too much on individual stocks but talking about Zurich Insurance, their Problem in 2002 was incompetent management. So your point is even more severe - it doesnt just take an economic downturn to take a share down. You only need a few years of bad management. So individual shares means you need to constantly monitor your share - unless you just decide to mentally write it off in 5-10 years and then just take every dividend ad manna coming from above.

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