14.05.2018

Investing money − what opportunities are there?

Are you reluctant to simply put your money in a savings account? What other options are available? Here’s an overview of the most common options for investing money:

  • A share is a security and represents a proportion of a company. By purchasing shares, you become a shareholder and therefore a co-owner of the company. This gives you certain rights and obligations. If the company makes a profit, you will normally receive a share of the profit paid out as a dividend. If lots of buyers believe a company will be successful in future, demand for this share rises, which in turn increases the share price. Actual share price trends are difficult to predict.
  • Bonds Compared to shares, bonds are generally a lower-risk form of investment, as they tend to be less affected by financial market fluctuations. Bonds are securities which usually run over a specified period, with the aim that the debtor repays the money loaned after several years. The creditor is compensated with interest for the loaned money.
  • Medium-term notes:
    In contrast to bonds, medium-term notes are not traded on the stock exchange and it is only possible to withdraw the invested capital early if the issuer of the medium-term note, i.e. the bank, allows you to do so. The maximum duration in Switzerland is ten years.
  • Funds (also known as investment funds) are diversified investment tools. The investor’s money is invested in a range of securities by the fund manager. Overall you can decide if you want to invest in one specific investment category (e.g. only in shares like in an equity fund) or in several categories (e.g. in shares, bonds and real estate in the case of an asset allocation fund). Every fund follows a specific strategy which determines how the money that has been entrusted to it is invested.
  • Generally, ETFs (exchange traded funds) track the performance of a financial market index. As such, ETFs are very similar to index funds.
  • Structured products are financial products composed of base values and derivative components.
  • Precious metals such as gold or silver are also very popular as part of a portfolio, whether purchased directly as bars or coins, or via a fund or ETF. Investors in precious metals must be aware that no interest or dividends are generated. Only the value, in other words the purchase and sale price, changes over time.

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