Whether it is for your retirement provisions, buying your own home or greater financial self-determination – if you invest your money properly, you can make your dreams come true. Swiss Life financial expert Frischta Rahiq shares valuable tips on how investors in Switzerland can achieve long-term success with clear goals, well thought-out strategies and a focus on taxes and risks.
Many people leave their savings in their bank account for years – often generating no returns and with the risk of inflation reducing their purchasing power. It can make a lot more sense to invest your money. When you do this, the capital works for you, continuing to grow steadily through interest, dividends or price gains. Even small monthly payments can enable you to build considerable wealth over the years thanks to the compound interest effect.
However, investors must be prepared to accept price fluctuations – the key factor is having a long-term investment horizon. Even small monthly payments can grow into a considerable sum over the years thanks to the compound interest effect. If you invest your money wisely, you ensure financial self-determination and the opportunity to realise your personal dreams more quickly. You can find the most important tips for investing money here.
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1. Create a budget
First, you should prepare an overview of your financial situation. List your income and expenses for the past three years in writing – ideally in an Excel table. It is important to distinguish between fixed costs (e.g. rent, insurance, taxes) and variable costs (e.g. leisure activities, travel, food). Your variable expenditure is the main area in which you have potential to make savings. Check what you regularly spend a lot of money on. Over time, expenses like your daily coffee to go and regular food takeaways can add up to a large sum. Once all your income and expenses have been clearly listed, you can calculate your personal annual savings rate, which will be used as the basis for the next steps.
Financial tip: Before you start investing, it is advisable to accumulate an emergency reserve amounting to several months’ salary. This reserve should be deposited in an easily accessible account so that you can withdraw from it immediately in the event of an emergency.
Savings tip: If you save CHF 150 a month – for example by forgoing streaming subscriptions, take-away coffees and spontaneous online purchases – you can accumulate a sum of around CHF 22 000 over ten years (based on an assumed return of 4%).
2. Set personal savings targets
Investing money is especially motivating if you have specific goals. Define short-term (e.g. new furniture, a trip), medium-term (e.g. buying your own home) and long-term (e.g. retirement provisions) goals. Allocate your savings specifically to these three areas.
💡 Practical example: A young family is pursuing their dream of buying their own home in 12 years’ time. To this end, they invest CHF 1000 a month in a mixed fund (50% equities, 50% bonds). Assuming an annual return of 4%, their assets will grow to around CHF 184 000 over this period – a solid foundation for making their dream home a reality.
3. Investing money: work out your investment andrisk profile
To find out how to invest your money, you should first determine your personal investment profile. Be honest and realistic as this is the only way to define a financial strategy that is ideally suited to your needs.
To do this, you should answer the following questions:
- How long can I invest my money without needing it?
- How much money can I save every month?
- How much money do I want to invest each month?
- Do I have experience in finance or am I a novice?
- What kind of mentality do I have? Am I more willing to take risks or more cautious?
- How much market fluctuation can I personally tolerate?
- What are my expectations and needs?
- Which factors have a major impact on my investment decisions?
(e.g. previous experiences, opinions of friends, information from social media)
When determining the investment profile, it is crucial to distinguish between risk appetite and risk capacity. Not everyone who is prepared to pursue a higher-risk strategy can actually afford to do so – on account of their income, financial situation or lack of reserves, for example. Conversely, not everyone with the necessary financial stability is prepared to accept higher portfolio fluctuations. Both factors – risk appetite and risk capacity – are taken into account in the risk profile and form the basis for an appropriate investment strategy.
💡 Practical example: If you want to invest CHF 10 000 for only three years, you should not invest exclusively in equities – the risk of temporary price falls is high. Bonds or a savings account are more suitable for such short-term investments.
4. Which investment solutions are available?
There are various options for investing your money. They can be broken down into three classic main categories:
Individual securities (e.g. equities, bonds)
Equities offer high earnings prospects but are associated with equally high risks. These investments therefore require a sound knowledge of the financial market and the ability to manage your own portfolio.
This option is suitable for investors whose financial life planning does not depend exclusively on this form of investment, who would like to invest actively and who have the relevant knowledge.
Funds
Funds offer a balanced mix of different individual securities, thus better absorbing fluctuations in the value of individual equities. There are different fund types, such as equity, bond and strategy funds. A distinction is also made between actively and passively managed funds:
- Actively managed funds are continuously monitored by financial experts and adjusted as necessary with the aim of outperforming the market (the benchmark).
- Passively managed funds, on the other hand, only track a market index and are rarely adjusted (example: index funds/ETFs).
This option is suitable for investors who wish to broadly diversify their assets and rely on professional management rather than studying market developments on a daily basis.
Assetmanagement
In asset management, asset managers invest the capital entrusted to them in various fund products on the market and are responsible for managing them. Depending on the fund type and the market environment, they employ a range of strategies aimed at generating stable returns and minimising risks.
This strategy is ideal for people seeking a professional asset management service and wishing to leave their investment decisions to the experts.
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5. Consider costs and fees
Funds and asset management mandates involve various costs, but these should always be considered in the context of quality, security and performance.
Focusing solely on the lowest price can be counter-productive. While low fees might appear attractive, they often involve compromises in terms of service, strategy and stability. By opting for professional asset management, you are investing in expertise, security and reliability.
Experienced asset managers are particularly valuable in periods of market uncertainty. A clear investment strategy, active risk management and personal, professional support help to protect your assets – and create long-term trust.
6. Carefully select a financial services provider
You can invest money via various channels – for example banks, insurance companies, independent asset managers and online portals.
If you opt for an online portal, in most cases you will be acting entirely independently. From product selection to risk assessment, everything is in your hands. This requires a certain amount of expertise, time and decision-making ability.
On the other hand, if you have less experience or would like personal support, you are in good hands with an established bank, an insurance company or a reputable asset manager. The latter are familiar with the capital market, monitor investments on an ongoing basis and are on hand with advice when you need it.
Financial tip: The following questions can help you to choose a financial partner:
- How did I feel during the consultation?
- Was the information given to me understandable?
- Have my specific needs been addressed?
7. Determine the investment type
When you invest money, it is important to choose the right investment type. The following options are available: one-time investments, regular investments and mixed versions.
One-time investment:
In the case of a one-time investment – also known as a lump-sum investment – a larger amount of money is invested all at once. Unlike a savings plan, there are no regular deposits. This form of investment is particularly suitable for people who already have a significant amount of capital at their disposal and would like to invest it strategically.
Regular investments:
With regular investments, you invest a fixed amount at set intervals – for example every month. This strategy exploits a phenomenon known as the cost averaging effect. When prices fall, you receive more units for the same amount; when prices rise, you receive fewer. Over time, this results in an average entry price that can smooth out price fluctuations. This is a smart strategy for investors who want to invest on a long-term basis and avoid the risk of committing all their capital at the worst possible time – such as when prices are at a peak.
Mixed version:
With the mixed version, you combine a larger one-time initial investment with regular deposits – for example as part of a savings plan. Your capital thus benefits from the compound interest effect from the outset, while the regular contributions mean you also take advantage of the cost averaging effect, smoothing out market fluctuations. This strategy is suitable for investors who wish to invest existing savings but at the same time continue accumulating capital in a disciplined manner over the long term.
8. Remain objective
Global political events and economic crises can have a major impact on the financial markets in the short term. In such moments, it is important to keep a cool head and avoid acting impulsively. Panic selling and abrupt changes to the investment strategy rarely lead to good outcomes.
Tip: If you are unsure about something, talk to your investment advisor. A trusting relationship on an equal footing helps you to make the right decisions, even in turbulent times – because good financial advice is based on expertise, trust, transparent communication and mutual respect.
9. Be patient
Investing for the long term pays off. Statistically, if you adopt a diversified approach to investing over 15 to 20 years, you have a very high probability of generating positive returns. Short-term fluctuations are part of everyday life as an investor – funds can also lose value from time to time and individual securities have to
be switched.
The important thing is to remain calm and not to react hastily. A sound finance and pensions strategy takes such fluctuations into account from the outset. Have faith in the expertise of your advisor – he or she will make targeted adjustments as necessary without losing sight of your long-term goal.
10. Get advice
A good financial strategy thrives on flexibility – after all, life seldom goes according to plan. Whether you’re met with a promotion, a new addition to the family or a separation: by informing your advisor of changes early on, you lay the foundation for a strategy that adapts to your new circumstances.
Regular meetings will help you to review your goals, adjust your priorities and identify opportunities. With good preparation, every consultation can be an important step on the path to a self-determined financial future.
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Frischta Rahiq
Frischta Rahiq is a certified life and pensions specialist and financial advisor with 20 years of experience in the financial sector. Prior to her career at Swiss Life, she worked as an investment advisor at a major Swiss bank. Since 2016, she has successfully supported both private and corporate clients with all financial matters at Swiss Life. Since the beginning of the year, she has been heading a team of pensions and financial advisors and passing onher many years of expertise in the role of Sales Manager.
Frischta explains her credo
“Investments are a great way to accumulate capital over the long term. You just have to adopt a self-determined approach to your finances and seek advice.”
FAQs – frequently asked questions about investing
The best strategy is broad diversification across different asset classes. It is essential to have a long-term investment horizon and a portfolio that matches your risk profile. ETFs and individual securities such as equities or bonds, actively managed funds, asset managers and pension solutions such as pillar 3a and pillar 3b are popular options. Tax-optimised single-premium products from insurance providers are also increasingly in demand.
That depends on many factors, such as your investment experience, risk attitude and investment strategy. Equities can be a higher-risk option, especially for those who are new to investing, as they are subject to greater fluctuations in the short term. If you invest on a long-term basis and broadly diversify your portfolio, statistically, equities offer you the best chance of achieving attractive returns. The key is not to be unsettled by short-term price fluctuations.
Capital gains from securities are generally tax-free. Dividends and interest are considered income and must be declared as income in your tax return.
There is no clear guide figure – the right amount depends on your personal situation. Factors such as marital status, ongoing obligations and planned expenses play an important role. As a rule of thumb, it is advisable to have an emergency reserve of three to five months’ salary in a savings account that can be accessed at any time.
Yes, because pillar 3a is geared to a long-term investment horizon and thus offers several advantages. On the one hand, deposits are tax-deductible, and on the other, securities-based solutions open up attractive return opportunities on the capital market. What is key is that the investment strategy you select suits your personal goals, risk capacity and risk appetite.
Yes. You can invest independently via online broker portals or banks. However, it is worthwhile seeking advice in order to avoid typical beginner mistakes.
Investment tips are specific recommendations that help you to invest money sensibly and on a long-term basis. This includes drawing up a budget, setting personal savings targets and determining your own investment and risk profile. A good overview of the different financial solutions that are available is equally important. Once this foundation has been created, it is a question of selecting the right investment type, keeping a cool head in the face of market fluctuations, thinking long term – and being patient.
Balanced strategies, such as mixed funds or professional asset management, are suitable for investing money over a medium-term investment horizon of five years. Pure equity investments are often too risky for an investment period of this length, while savings accounts offer very little return.
The best investment depends on your goals and risk appetite. As a rule, it is advisable to invest in a broadly diversified manner and on a long-term basis. Ideally, you should seek advice in order to gain a comprehensive overview of the various options. That way you can form your own picture and choose the solution that best suits your current phase of life.
Legal notice: this blog article is advertising. The information provided is for information purposes only and is without guarantee and liability. It does not constitute an offer or a recommendation to conclude legal transactions. In Switzerland, financial services are not provided by Swiss Life Ltd but exclusively by Swiss Life Wealth Management Ltd.
