Defining your investment strategy: how to invest in line with your goals

What is an investment strategy?

An investment strategy determines how you spread the money you want to invest across different asset classes. Asset classes are groups of assets with similar characteristics. They include:

• Liquidity: money available at short notice
• Bonds: where you lend money to a company or state and receive interest
• Shares: where you invest in a company
• Alternative investments: examples include gold or real estate

How much money you invest in individual asset classes depends on your personal situation and your goals. You therefore need to set your investor profile before you select a strategy. 

How do you find the right investment strategy?

Your investor profile forms the basis for your investment strategy. It shows how much risk you can bear financially and want to assume personally and how long you can invest your money for. This helps you decide how to spread your money across the various asset classes. The mix should match your goals, your financial capabilities and your personal security needs. It’s reflected in the equity component, for example: a higher proportion offers higher potential returns in the long term, but also entails greater fluctuations in value and potential losses. A long investment horizon gives you more time to wait for a potential recovery after price declines, but it doesn’t guarantee that losses will be recouped. This means it’s crucial to determine whether you can cope with potential losses and deal with the fluctuations.

How PostFinance can help you choose your strategy

PostFinance asks you about your financial situation, your risk appetite and your planned investment term. This will help you create your investor profile, which forms the basis for any recommendation of one of PostFinance’s five investment strategies. We also record your ESG preferences and investment focus, allowing you to determine which sustainability aspects and investment priorities are taken into account in the specific selection of your investments. You can answer the questions yourself online or discuss them with an advisor to create your investor profile.

How do you implement your investment strategy?

Once your investment strategy is set, it’s now about implementing it. You can select your investments yourself, seek advice before making investment decisions or leave decisions to the professionals as part of asset management. Which option you choose will depend on how much of a role you want to play in decision-making. 

When implementing your strategy, it’s important to spread your money broadly over various investments and asset classes. This allocation is referred to as diversification. It helps reduce your dependency on individual investments and can lower risk in the portfolio. 

One way to implement your strategy is via asset allocation funds. These bundle various investments into one fund and spread your money over several asset classes. 

If you want to customize your investments, the core/satellitestrategy  The core/satellite strategy is an investment strategy that has become established in recent years. The assets are distributed across a larger core and a smaller part with so-called satellites. The core consists of around 80% of the total investment and is, in turn, the main part of the portfolio. The satellites allow investors to determine individual priorities, for example with specialized funds. is another option. A broadly distributed core forms the basis of your portfolio. You set your own priorities with supplementary investments.

When should you review your investment strategy?

Even after implementation, your investor profile remains the foundation for your strategy. You should review whether it still suits you if your goals, financial situation or investment horizon change.

You should also check regularly whether your money is spread over the asset classes as provided for in your strategy. If price performance varies, the allocations may change. In this case, it can make sense to adjust the allocation in line with your chosen strategy.