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My bank has announced negative interest rates starting Q1 2016. I have CHF 250'000 in that savings account (Swiss Francs).

Now, pretty much all other banks will probably follow suit soon, if they haven't already. Also, government bonds yield negative interest, on terms up to a 15 years, and 1% at 30 years.

When I invest in foreign stocks or bonds, the problem is unstable exchange rates (Euro & US Dollar) make such an investment a pretty risky thing, especially as the Swiss Franc is too stable, while the Euro is not.

So, if I invest into foreign stocks/bonds, even if get positive results, I run into a grave risk of losing money, in case the Franc appreciates even further, which is very possible if the ECB increases QE (which has been announced).

Tax free, I can only put appx. CHF 7000/year in a pension fund (401k analog). I don't need the money anytime soon, but I would prefer not to have it in a 15+ years bond. I'd prefer having it (more or less) fluid at any time, if possible.

What are my best options to invest that money, so I can make some healthy positive interest on it (or at least no negative interest)?

Preferably without putting everything at the mercy of one stock, and I'm not convinced that funds are a good idea.

Kevin
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Quandary
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    What about physical gold. Gold is at low right now and is likely to appreciate. – Dheer Nov 02 '15 at 15:28
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    Gold is really not a good investment. – Almo Nov 02 '15 at 16:10
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    You're running into a situation into which this was design to have you run. The point of negative interest is to force people out of the "stable" CHF. Unfortunately there's no good solution here. – littleadv Nov 02 '15 at 16:40
  • Does Switzerland have ETFs or similar? IE, where you can just invest in 'the Swiss stock market', in a relatively liquid form (ETFs typically are easily and cheaply traded, more so than a traditional mutual fund)? – Joe Nov 02 '15 at 17:58
  • @littleadv: Well, there's also the thing where if there is no physical money (which may not be too far off in some parts of the west), negative interest rates could be a powerful tool for the central banks, for better or worse. Of course, you can always escape into equitiy or physical goods. – tomasz Nov 02 '15 at 23:43
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    16 upvotes against Gold? Many pro advisors say you should put around 5% of your total assets in physical metals. I wouldn't say Gold is at a 'low' right now...it's taken a hit and is off ~30-40% from its highs a few years ago, but it's still pretty high right now. I'd seriously take a look at Silver for the 5% rule. The average gold to silver price ratio historically is about 27 and today it's around 70 which means silver is currently undervalued relative to gold (in historical terms). If you pay someone like a bank to hold your metals then that would similarly eat away at your assets.. – public wireless Nov 03 '15 at 02:35
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    ...like negative interest rates, so you'd need to be prepared to buy and store your precious metals somewhere safe, like a home safe or buried in your backyard, or someplace safe where only you and maybe your wife know about. Just something to consider. – public wireless Nov 03 '15 at 02:38
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    @publicwireless Gold pays no interest. Nor does silver. Neither is an investment that meets the requirements in the question. – Chris W. Rea Nov 03 '15 at 03:00
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    @publicwireless why on earth would you invest in gold? or silver? What's the point in "average gold to silver ratio"? What utility is in that specific metal? It's a reminiscence of an era long gone, there's no rational justification to investing in "precious" metals. – littleadv Nov 03 '15 at 08:06
  • @littleadv not that long gone, really; first, less than one full business cycle is not that long; second it's rather "repeatedly gone" if we really start counting, and that is a different thing. – Eugene Ryabtsev Nov 03 '15 at 09:41
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    The OP clearly wants to invest his money, not speculate on precious metals. – Lilienthal Nov 03 '15 at 11:16
  • @Lilienthal The OP clearly wants to save his capital under upcoming pressure (of the end of business cycle, but that is not my point). Whatever is the advise, getting the facts wrong is not helpful. – Eugene Ryabtsev Nov 03 '15 at 15:39
  • @littleadv I agree that I personally wouldn't invest in gold or silver, but both are very desirable for electronics, because they are very conductive. It's the real reason its so easy to sell or trade in your used phone even when its broken – DoubleDouble Nov 03 '15 at 16:01
  • @DoubleDouble actually industry is responsible for a small fraction of trading in gold or silver. As opposed to oil, copper or coal, most of the trade in gold/silver is purely speculative. – littleadv Nov 03 '15 at 16:18
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    @EugeneRyabtsev You keep using these words... I don't think they mean what you think they mean. – littleadv Nov 03 '15 at 16:20
  • @EugeneRyabtsev "What are my best options to invest that money" – Lilienthal Nov 03 '15 at 16:46
  • @littleadv Whatever they mean to anyone else in any other context, here I'm talking about bust following malinvestment. – Eugene Ryabtsev Nov 03 '15 at 17:32
  • @littleadv willing to continue in chat sometime later. – Eugene Ryabtsev Nov 03 '15 at 17:43
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    @littleadv Gold and silver are hedges against inflation. With inflation, gold holds its value whereas the dollar becomes worth less. The Low to negative interest rates that the OP mentions will eventually lead to inflation over prolonged periods. In case you haven't been paying attention, central banks in Europe and the US Fed (and probably China though I don't have the facts on that one) have been trying to combat DEFLATION by inflating bank reserves through their QE programs. When the FED backstopped the too big to fail banks back in 2008-2009, that was a means of reinflating – public wireless Nov 04 '15 at 00:50
  • ...the housing market to keep real estate prices at their (IMO) already inflated levels rather than letting the free market rebalance itself, and gold took off as a result. I could go on about this topic for days, but safe to say, advisers know what they're talking about when they recommend 5% of total assets to precious metals. – public wireless Nov 04 '15 at 00:55
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    There are other hedges against inflation that have objective utility (e.g. real estate, oil). And at least one of them has income potential (opposed to just appreciation potential). If you're all about gold that's cool but it doesn't make it a good investment. People want jewelry, but they need a place to live. – Jared Smith Nov 04 '15 at 02:07
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    @publicwireless but again - what's so special in gold that you expect it to hold value more than, say, real estate or oil - commodities with significant utility? When you want to hedge inflation risk - you invest in commodities, that's true. It's just your particular choice of gold that is weird. – littleadv Nov 04 '15 at 03:12
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    Folks, I'm not necessarily advocating gold over some other asset like oil or real estate (FWIW I like silver right now for long term horizon). What I responded to was the point someone made that Gold is not a good investment which is misleading because, while you probably wouldn't want to put half your portfolio in gold, many advisers tout the 5% rule for the purposes of diversification. A well diversified portfolio would also probably include some real estate, as the 2 aren't mutually exclusive. And for the record, gold CAN generate income if you buy the mining stocks, which pay dividends – public wireless Nov 04 '15 at 03:58
  • The Swiss France is NOT stable, the central bank had to fight tooth and nail to prevent big movements between 2011 and 2014 and the CHF has experienced a massive increase in value against everything else when it stopped in January 2015 (i.e. also e.g. the US dollar, which is why it makes sense to regard this as a change in the value of the CHF and not a decrease of the EUR). – Relaxed Nov 04 '15 at 09:18
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    The truth is, you're still likely saving more with your negative interest than if you had an EUR account with a positive interest (the usual rates are around 0-2% p.a.), simply because of the massive inflationary losses. Today's world is not a good place for saving, sadly :/ We're actually exploring options to save money in swiss banks, despite the negative interest rates. And don't even get me started on real estate - the ads are full of beautiful things like "The higher your loan, the lower your interest!" - the bubble is so ready to burst it barely deserves a comment... – Luaan Nov 04 '15 at 12:53
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    I haven't seen anyone forward the idea of dividend stocks. The good ones are huge companies with fairly stable stock prices. Any thoughts? Compliments? Insults? –  Nov 04 '15 at 19:24
  • @Luaan What “inflationary” losses? The eurozone barely has any inflation at all, much less than it needs. The OP's problem is not inflation or any stability issue with the euro, it's that putting his money abroad while living in Switzerland exposes him to a lot of foreign exchange risk. – Relaxed Nov 04 '15 at 21:31
  • Keeping assets in CHF is not that much different than keeping assets in gold or bitcoin. Their value is just about as abstract. – Agent_L Nov 05 '15 at 09:15
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    Gold is not really feasible here as its not liquid. However, the sanctimonious people here crying that gold is speculation completely miss the point. No one buys gold to get rich. They buy gold to stay rich. Really though, its semantics, who cares. Here are the facts. If you live in Japan, Europe, Canada, Malaysia, Mexico, Indonesia, South Africa, Korea, Brazil, or China, and last time I checked most of the world does, you have seen your wealth decline against the dollar and in many cases have seen double digit inflation thisyear. To not own gold in such environment is fiscally irresponsible. – von Mises Nov 05 '15 at 22:56

10 Answers10

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I'd prefer having it (more or less) fluent at any time, if possible...

And the Swiss National Bank (SNB) will do their darndest to make this a costly option. That's exactly the point of negative interest rates. They don't want to help you saving money. So you will have to choose what to give up: liquidity, or profitability.

But for now, you still have alternatives. The way you described it one could think that all banks will soon start to charge all their clients. That's just a distortion of facts.

If you are happy with a (close to) 0 income, you might consider opening multiple bank accounts. Many banks charge the negative interest only from certain thresholds (i.e. CHF 100k). Since you're clearly a Swiss resident, that's easy to do for you.

If you don't want to give up making an income, then you have to sacrifice liquidity. There simply aren't any short term (less than 2-3 years) instruments in Swiss Franc that are both safe and yielding a positive income. Which means that you will have to take much more risk then you had with a savings account. Ask your advisor for an investment proposal, but also consider bank independent advisors.

vic
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    I think the opening of 2 extra bank accounts is the easiest and safest method of avoiding negative interest rates. Keeping all that money in actual cash just sounds all together scary and worrisome. – Dean MacGregor Nov 02 '15 at 18:03
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    @Dean MacGregor: I've simplified the situation for clear view in my post. In reality, it's already dispersed on 5 accounts on 3 different banks. So don't worry too much. I'm not storing more than the governmental guarantee for deposits in any of the banks. – Quandary Nov 03 '15 at 06:54
  • @DeanMacGregor Was that meant to be a comment on Dan Neely's answer? Vic doesn't mention physical cash at all. – Lilienthal Nov 03 '15 at 11:19
  • @Lilienthal I think his comment makes perfect sense. It's implicit in my answer that I wouldn't even consider the physical cash solution, he just spelled it out. – vic Nov 03 '15 at 11:27
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Withdraw your savings as cash and stuff them into your mattress?

Less flippantly, would the fees for a safe deposit box at a bank big enough to hold CHF 250'000 be less than the negative interest rate that you'd be penalized with if you kept your money in a normal account?

Dan Is Fiddling By Firelight
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  • Sadly, that's an option to consider. But it offers greater security than the mattress... ;) Another point to consider is, would the costs for a safe save be greater than repeated renting of a deposit box at the bank ... – Quandary Nov 02 '15 at 14:29
  • @Quandary a box at your bank is probably more secure though. While one in your home is probably secure against a quick smash and grab, more ambitious criminals in the US are able to steal very large gun safes (the size of a refrigerator and weighing hundreds of kgs) that are much harder to move than a small one stuffed with your savings would be. The likely payout from cracking it open would be much higher as well. – Dan Is Fiddling By Firelight Nov 02 '15 at 15:02
  • If you get a home safe, talk to an exper ang get a SAFE. The cheap gire chests are wonderful things for their purpose, but they are not secure. And make sure it is properly anchored; there have been cases of the whole safe being stolen so it can be broken into later. If you have a basement or other concrete slab, the most cost-effective solution is often a floor safe. (Yes, I'm a part-time locksmith.) – keshlam Nov 02 '15 at 15:14
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    This may not have any bearing on the OP's situation, but I was talking about a safe deposit box at a Bank of America branch (in USA), and was told that storing cash in the box was prohibited, so you might want to at least make sure that's not an issue. – JPhi1618 Nov 02 '15 at 16:17
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    Plus, cash in a safe deposit box is subject to seizure (as is anything else in a safe deposit box, for that matter.) If SHTF and you go to retrieve your belongings, and they are missing, what will you do when the bank manager looks at you and shrugs? – MrWonderful Nov 02 '15 at 16:27
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    @MrWonderful who do you think is going to 'seize' the contents of the OP's safe deposit box? – jwg Nov 02 '15 at 16:41
  • @DanNeely Almost every home in Switzerland has a small safe containing guns, and very few are stolen. – jwg Nov 02 '15 at 16:42
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    I assume things are better in Switzerland but in the US I'd be genuinely afraid of being accused of criminal activity when the time came to put my cash back in the system. – Dean MacGregor Nov 02 '15 at 18:02
  • @jwg: The Government, bank employee(s), the military, looters, thieves, take your pick. http://www.appraisers.org/all-about-appraisers-and-appraisals/consumer-library/article/2013/06/10/how-safe-is-your-safe-deposit-box- http://nypost.com/2015/09/12/woman-sues-santander-bank-over-safety-deposit-box-theft/ – MrWonderful Nov 02 '15 at 18:02
  • @MrWonderful Hard to see how it will be harder for the Government, the military, looters or thieves to sieze the contents of a safe though. – jwg Nov 02 '15 at 22:53
  • @jwg: This is true, but looters/thieves won't necessarily bring metal detectors to your home in order to find a well-hidden floor or wall safe. Neither may the military or Government. It really depends on how secretive/clever you are about it. But everyone knows there are likely valuables in safe deposit boxes. My only point was that SD boxes are not 100% safe. – MrWonderful Nov 02 '15 at 23:04
  • @Dean MacGregor: No, I can assure you, things aren't better in Switzerland. If you're taking more than 20'000 in cash, you need to fill out forms. Also, as of now, if you take greater-or-equal 20'000 in cash out of the account, the bank can charge you a certain % of the amount... (aka robbery) Though if that's your main problem, you might be able to take advantage of duty free warehouses (put your money into a work of art, and store it there, and cash it out when you need the money). Might even be safer than gold. Picasso doesn't create paintings anymore, so no inflation either. – Quandary Nov 03 '15 at 10:56
  • @DanNeely I won't even consider the all-cash-at-home option, the lost sleep and nerves alone are worth more than the negative interest... – vic Nov 03 '15 at 13:09
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    @DanNeely As for safe deposit boxes, they indeed are still very affordable but you have two main issues. Unless you are fine having rather larger amounts of money at home, you will have to go to your box for every withdrawal, and that's just a huge nuisance. The bigger issue, though, is what Dean mentioned: AML rules became very rigorous in Switzerland over the past few years. Putting cash back on the account, no matter where you held it, will prove to be a huge issue and some might need legal support to solve it. It's just not worth the trouble. – vic Nov 03 '15 at 13:11
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You obviously pay your taxes in Switzerland and are employed (judging from your comments on your maximum possible contribution to the 3. Säule).

Under these circumstances, your best best may well be to pay into the occupational pension system ("Einkauf in die 2. Säule"). Essentially, you can add funds to your pension plan to match non-existent employer contributions from times you spent studying etc.

The 2. Säule is usually defensively invested in bonds, so it's not a completely secure investment. In addition, it's a pretty fixed investment, since you can only get your money out if you buy a house or leave Switzerland for good. However, your entire payment into the 2. Säule is tax deductible, so the tax effect in itself should be a very attractive bit of "interest".

Your pension plan can inform you about the maximum possible Einkauf.

Stephan Kolassa
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    I'm aware of this option. In fact, if I were certain I would see that money ever again, I'd do precisely that. But I'm not so sure of that, with all the crooks in charge, actually quite the opposite, I don't think I will ever see that money again, even when I don't do a "Einkauf". Additionally, didn't they recently take "buy a house" out of that ? Or at least talk about it ? Additionally, there's no guarantee you'll ever reach pension age alive (might well be 70 by the time that it's my time). Nah, summa summarum far too risky, and too many question marks (like not being able to get it out)... – Quandary Nov 03 '15 at 06:16
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In Switzerland you should have access to many brokers with fair rates, e.g. Interactive Brokers.

Going through them you then put the money in various Swiss stocks like Roche, Novartis, Swisscom, Credit Suisse, Logitech, etc. No stock should be more than 10% of the total.

Since you pay 0% taxes on investment profits, you really should invest.

By going through a broker instead of your bank, you can cash out at any time without losing outrageous fees for the stock commissions (often 2% for banks, around 0% for brokers).

If you're employed you can also ask your employer to increase the amount of your salary that goes to the pension (2. Säule), which is not limited like the 7000 you mentioned (3.Säule).

Peter
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    If I was you, I wouldn't put 5 cents on any of these, Roche excepted. Credit Suisse and Swisscom is a horrible idea by the way. But thanks for the broker tip. – Quandary Nov 03 '15 at 06:44
  • Can't say anything about the stock picks, but note also that there is no need to put all the money in stocks. One could put e.g. 25% or 50% in stocks, and in good times the yields would offset the negative interest of the rest remaining in bank account. – jpa Nov 03 '15 at 06:48
  • @Quandary That's the advantage of buying stocks instead of funds. You can use your personal opinion to decide which stocks to buy. – Peter Nov 04 '15 at 08:30
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The problem is that every option comes with risk - as you note, if you put money in stocks, you could lose (and many stocks are overpriced). If you put money in bonds, you could lose (many bonds are overpriced). If you buy precious metals, they could fall further currently. If you hold cash, central banks might try to ban cash (we'll hear the typical "This will never happen" from financial advisers - and they'll be wrong). Cryptocurrencies are an option, but boy do they fluctuate, so there's risk here too.

Those are options and all come with risks, and here's my preferred approach to handling negative interest rates:

  • I agree with people who say that precious metals are a very bad investment choice; look at their record right now.
  • Make a list of everything that I expect that I'll need for the next thirty years that doesn't expire. Buy a 25 year supply of it. This still comes with risk of loss, like theft, so be aware of the possible downsides.
  • Make a list of trade-able goods that I think are under priced, and this helps if I know the market. Think of something simple like baseball cards; there are kids who make hundreds from these because they know the market well.
  • Invest money in a community. Think of taking friends and colleagues to dinner, lunch, you name it. Invest some money organizing groups that strengthen your community. This will pay dividends not only financially, but physical, social and mental health. You lose money investing in community and you gain so many benefits.
  • Consider "insurance shorts" such as betting against something that you think may not do well with a small fraction of your money that you're willing to lose, like only 1000 Francs. Expect to lose it, but if you're right, it might help you earn multiples.
DoubleVu
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  • There is one logical error in your post. Bond prices always reflect the relationship of current interest rates and the risk of issuer bankruptcy. The latter cannot be less than 0. Therefore bonds can hardly be overpriced (unlike equities). So, if you truly believe in further QEs or other measures to cut interest rates, bonds will be the best performing asset class. That's not an opinion, that's how it works. – vic Nov 05 '15 at 09:40
  • @vic K bruh. If you can't imagine the scenario that I'm referring to, you really don't know what you're talking about. – DoubleVu Nov 05 '15 at 15:11
  • @vic I've heard this a hundred times, and the math is there, but I still refuse to believe that a bond paying less than inflation and near 0% is a better choice than a high interest savings account paying the same rate. If rates go up the savings account will go up. If rates go down, well there isn't really any appreciable distance left for them to go. –  Aug 25 '21 at 22:36
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This does not really fit your liquidity requirement but consider buying a one or two room apartment to rent out with part of your savings. You will get income from it and small apartments sell quickly if you do need the money. This will help offset the negative interest from the rest. One downside is that other people have the same idea at the moment and the real estate prices are inflated somewhat.

SoulsOpenSource
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    A one or two room apartment with "part of your savings"? Have you checked real estate prices in Switzerland lately? I'm not sure he could buy something even if he invested the whole amount. And "somewhat inflated" seems a very modest description of the current situation. Rental yields are around and even below 2%. What do you think will happen to the value of your property once interest rates start to rise? If you want to buy to save on rental cost, fine. But buying as an investment at this time is just ludicrous. – vic Nov 03 '15 at 14:32
  • @vic: I completely agree. However, a one or two room apartment is well in range with my savings; Using the 20% minimum capital rule, I could buy something as expensive as 1'000'000 CHF. However, using the interests should not exceed 1/3 of your salary rule, I'd say CHF 600'000 is more realistic at this time. With that you can surely buy a one or two room appartment (though not in the center of Zurich, of course). But an appartment will be far harder to re-sell (without loss) than a house, especially if interests rise again. You can buy a older one starting from 270'000. – Quandary Nov 12 '15 at 14:05
  • I don't know what things are like in Switzerland, but in the U.S. you have 6-7% in transaction costs when you sell real estate and 1-2% when you buy. –  Aug 25 '21 at 22:38
1

How about placing the money in a safety deposit box at the same bank? This will probably work out cheaper than the loss due to negative rates.

Although, I'm quite sure the banks won't like this idea.

Joseph King
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You might want to talk with your financial planner about any or all of the following:

  • Permanent life insurance
    • Whole Life Insurance
    • Universal Life Insurance

as well as

  • Annuities
    • Fixed
    • Variable
    • Equity-indexed

Some of these offer the guarantee of a minimal amount of interest, as well as the ability to take a loan out against the cash value, without lapsing the policy. They may also offer certain tax advantages depending upon your jurisdiction and situation.

MrWonderful
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    As my great-grandmother (born 1897) always said: life insurance is the safest way to guarantee you die early ;) And the more things change, the more they stay the same. So - a no no no no no no no no no to that. – Quandary Nov 03 '15 at 06:34
  • @Quandary not sure what you mean... with "my luck" buying an insurance policy would mean that I would never die (it would never pay out). An annuity on the other hand, yeah... i would probably die the day after I took it out (unless it guaranteed a return of all the principle if I died before it paid out) –  Aug 25 '21 at 22:39
0

First off, the answer to your question is something EVERYONE would like to know. There are fund managers at Fidelity who will a pay $100 million fee to someone who can tell them a "safe" way to earn interest.

The first thing to decide, is do you want to save money, or invest money. If you just want to save your money, you can keep it in cash, certificates of deposit or gold. Each has its advantages and disadvantages. For example, gold tends to hold its value over time and will always have value. Even if Russia invades Switzerland and the Swiss Franc becomes worthless, your gold will still be useful and spendable. As Alan Greenspan famously wrote long ago, "Gold is always accepted."

If you want to invest money and make it grow, yet still have the money "fluent" which I assume means liquid, your main option is a major equity, since those can be readily bought and sold. I know in your question you are reluctant to put your money at the "mercy" of one stock, but the criteria you have listed match up with an equity investment, so if you want to meet your goals, you are going to have to come to terms with your fears and buy a stock.

Find a good blue chip stock that is in an industry with positive prospects. Stay away from stuff that is sexy or hyped. Focus on just one stock--that way you can research it to death. The better you understand what you are buying, the greater the chance of success. Zurich Financial Services is a very solid company right now in a nice, boring, highly profitable business. Might fit your needs perfectly. They were founded in 1872, one of the safest equities you will find. Nestle is another option. Roche is another. If you want something a little more risky consider Georg Fischer.

Anyway, what I can tell you, is that your goals match up with a blue chip equity as the logical type of investment.

Note on Diversification

Many financial advisors will advise you to "diversify", for example, by investing in many stocks instead of just one, or even by buying funds that are invested in hundreds of stocks, or indexes that are invested in the whole market. I disagree with this philosophy.

Would you go into a casino and divide your money, putting a small portion on each game? No, it is a bad idea because most of the games have poor returns. Yet, that is exactly what you do when you diversify. It is a false sense of safety. The proper thing to do is exactly what you would do if forced to bet in casino: find the game with the best return, get as good as you can at that game, and play just that one game. That is the proper and smart thing to do.

Five Bagger
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  • Your assortment of stocks sounds more reasonable than that of Peter. Georg Fischer is probably exporting a lot, so with a strong Franc, might not be the best of ideas. I have been thinking about this option as well. It seems to be the most reasonable in my opinion. – Quandary Nov 03 '15 at 06:38
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    @Tyler "Focus on just one stock--that way you can research it to death." Wow, that is just about the worst advice I've ever read here. Ever heard of a little thing called bulk risk? Quandary, Trust me, that's the least reasonable thing you could do. – vic Nov 03 '15 at 09:10
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    @vic: I skipped reading that part. I meant investing into an assortment of already long-lived "blue chips". Otherwise, you're right, all assets on one card is a terrible idea. – Quandary Nov 03 '15 at 10:50
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    The problem with any of those stocks is that no matter how much research you do, you can't predict things like the VW "defeat device" scandal. Choosing several of them because they're safe (like @vic suggests) is reasonable. Choosing one because you think you know everything there is to know about it... bad idea. – Bobson Nov 03 '15 at 18:10
  • See my comments on diversification appended to answer – Five Bagger Nov 03 '15 at 22:07
  • @Tyler Your comparison couldn't be more wrong. You seem to mistake stocks for binary options. Unlike the latter, a stock has more than just two outcomes. – vic Nov 03 '15 at 23:37
  • @vic Arguing about investment philosophy is in bad taste, since it is hard to prove one way or another. I could start talking about my investment success, but would that really prove anything? No. If you have an answer, make your answer. Sitting around criticising other answers is cheap and low class. – Five Bagger Nov 04 '15 at 00:54
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    @Tyler I'm sorry you're offended, this was not my intention. But this is not a matter of "philosophy". I have no problem with you saying that you personally believe that investing in a diversified way is not the right thing - for you. But claiming that a stock investment and a bet with only two outcomes are one and the same thing is logically and mathematically false. – vic Nov 04 '15 at 01:08
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    The casino analogy only works with negative sum games, the more low value games you play the closer your results will be to the "odds" of the game. For casino games those odds are almost always less than 100%, often around 80% so the "average player" will keep 80% of the money they use each game. Investments should (hopefully) be a positive sum game, so the average investor makes money, so assuming the "average investor" ends the year with 105% of what he started with diversification will ensure you get closer to 105%, not much more or less. Lack of means you make an unpredictable %. – Vality Nov 04 '15 at 15:29
  • @Vality amen. Note that even buying a safe stock with advice from someone incredibly good at investigating which stock to buy can be disastrous (eg Buffet's purchase of Tesco shares). Some of my safe stocks have collapsed, and some of my 'gamble' stocks have rocketed. Trouble, is I could never tell you before purchase which would do either (or I'd be dictating this to a busty secretary from my island and not sitting at my desk pretending to work :-) ) Diversification is the way to smooth overall returns in the interests of safety. – gbjbaanb Nov 05 '15 at 10:32
  • The comments on this answers illustrate why most people who invest lose money. – Five Bagger Nov 05 '15 at 11:04
  • Studies have shown that something like 96% of stocks don't do better than bonds. To put it another way, if you have 5 choices to invest in, four of which will return 10% and 1 of which will return 50%, you only have a 20% chance of beating the market, and an 80% chance to lag by over 60%. If only 4% of those stocks beat bonds then your odds are much much worse. –  Aug 25 '21 at 22:45
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You could buy Bitcoins.
They are even more deflationary than Swiss Francs.
But the exchange rate is currently high, and so is the risk in case of volatility.
So maybe buy an AltCoin instead.

  • LiteCoin
  • Ethereum
  • Ripple
  • Monero
  • Dodgecoin
  • Peercoin
  • Namecoin
  • Auroracoin

See altcoin market capitalization for more information.
Basically, all you'd be doing is changing SwissFrancs into Bitcoin/AltCoin.
You don't need a bank to store it. You don't need to stockpile cash at home.
Stays liquid, there's no stock portfolio (albeit a coin portfolio), unlike in stocks there are no noteworthy buy and sell commissions, and the central bank can't just change the bills as in classic-cash-currency.

The only risk is volatility in the coin market, which is not necessarely a small risk.

Should coins have been going down, then for as long as you don't need that money and keep some for everyday&emergency use on a bank account, you can just wait until said coins re-climb - volatility goes both ways after all.

User1
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  • Why would you expect any of these other coins to have stable pricing. Do you really think there's that much demand for random crypto currencies? – NL - Apologize to Monica Jun 08 '17 at 08:36
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    @Nathan L: I don't. But Bitcoin looks like it is currently near to a local maximum. In order to minimize risks, you don't want to buy coins that look like they are currently near a local maximum. – User1 Jun 08 '17 at 09:31