Investing in times of uncertainty

Great uncertainty over the economic climate and the global political situation can make it more difficult to decide to invest. Which types of investment are regarded as being particularly safe and what factors must be taken into account when making investment decisions in turbulent times?

“Safe havens”

Even in times of uncertainty, some investments are seen as being crisis-proof. For example, the Swiss franc is a popular currency worldwide when the global markets are turbulent. Swiss federal government bonds are also seen as a very safe financial investment and there is great demand for them from investors, especially in times when the value of shares and other investments fluctuates significantly. Bonds issued by stable Swiss companies are another option for relatively safe investment. Gold is also generally seen as being a relatively secure investment which is why the gold price trend tends to be anti-cyclical. The price of gold often increases in times of uncertainty.

Safe investment also means sacrifice

Securities representing very safe investments also generate lower returns. It therefore comes at a cost! Investors must be aware that high interest and safe investment rarely go hand in hand. The “magic triangle“ of financial investments illustrates this relationship.

Don’t put all your eggs in one basket

As it’s impossible to accurately predict how specific types of investment will perform, it is wise not to put all your eggs in one basket. The keyword here is diversification. Never invest your assets in just one share or bond, in an economically weak country or a specific sector of the economy. Ensure your portfolio is diversified. If an investment does not perform as anticipated, you then have other instruments which can make up for this or at least cushion the effect.

This might interest you too