The reason for this is actually encouraging and quite obvious: price stability. While other countries are facing inflationary pressure, Switzerland’s consumer prices remain stable – protecting purchasing power while also strengthening the franc. It means the Swiss National Bank (SNB) no longer needs to tackle inflation, and is instead focusing on low interest rates to promote growth in the hope of easing the upward pressure on the franc.
But low interest rates also come with the risk of driving real estate prices even higher. Mortgages continue to be inexpensive, and the temptation to buy real estate at inflated prices is growing.
For investors, this has clear consequences: building up assets with traditional interest-bearing investments is no longer possible. Today, investors looking to grow their capital in the long term need to rethink their approach. Interest and compound interest are no longer the way to accumulate wealth. Returns can only be achieved where investments create real value and generate ongoing income.
Modern investment requires a well-thought-out strategy that combines shares, real estate and alternative investments into a balanced portfolio – with systematic risk management. In a low-interest world, the investment strategy is key.
The performance of individual investments is less important. Looking back, it would have been more profitable to buy additional gold at the beginning of the year. Hindsight, as they say, is always 20/20. But successful investors don’t chase after trends like this – they’ve already baked them into their long-term investment strategy.
With such preparation, even today’s major political changes should hold no fear. The global economy keeps on turning in spite of the India-Pakistan dispute, the Iran-Israel conflict and Russia’s war of aggression in Ukraine. Every day, companies create value by providing services or paying for them on behalf of customers. As investors, the owners of these companies rightly receive their share of this success. Real estate investments also create real value – where people invest in housing that others value as a home and will pay rent for.
So we remain convinced that it’s still worth investing in difficult times – even if simply lending money no longer yields returns. Fluctuations and uncertainties are all part of this – but they shouldn’t stop us making long-term, value-based investments. Far from it, in fact.
