Basic Concepts You Must Master If You Want to Invest In Switzerland

Written By Alla Levin
October 09, 2023

Basic Concepts You Must Master If You Want To Invest In Switzerland

Switzerland is a magnet for investors from all over the world. Countries such as Colombia, Mexico, and Peru have found a safe market to diversify their investments with attractive returns. If you are considering investing abroad due to the continuous rise of the dollar and the depreciation of your local currency, Switzerland is an option you should consider.

The financial sector is strategic for the country; it represents 9.2% of the national GDP and is home to over 250 banks and large insurance companies. In addition, bilateral free trade agreements are signed with the world’s economic powers.

The following investment concepts are the most popular among investors:

  • Shares: are those parts into which the capital of a company is divided, and each shareholder owns a percentage of it, the sum of all the shares being the equity market capitalization.
  • Digital assets: in the globalized world, there are various countries with monetary systems, financial entities, and companies that use multiple currencies to carry out transactions.

Among them are cryptocurrencies, digital assets cryptographically encrypted to guarantee the integrity of transactions.

Switzerland offers a wide spectrum of currencies to invest in, and you can do so with online banking services in dollars, euros, or Swiss francs, as well as digital wallets for the custody and sale of crypto assets such as bitcoin and ether.

  • Currencies: The US dollar is positioned as the primary global reserve currency and is in the hands of most central and commercial banks worldwide, representing more than 80% of daily market transactions.

Switzerland has the highest confidentiality and privacy standards, making it one of the favorite destinations for investors who want to diversify their portfolios. If you’re serious about investing in Switzerland, we recommend checking out FlowBank.

There is also the option of the euro, which is the official currency of 19 countries belonging to the European Union, making it a money used globally. In addition, it is the second reserve currency in the world and the second most traded in the foreign exchange market, only surpassed by the US dollar. The Swiss franc is another currency that goes outside the conventional and is considered a great store of value.

  • Investing in the Stock Market: stock investment is an opportunity to sell and buy various investment instruments such as stocks, bonds, certificates, and debt securities, among others.

It works with a free market dynamic; prices are set by supply and demand, and any investor can invest in stock securities.

  • ETF: An exchange-traded fund (ETF) is a basket of investments that allows you to invest in many securities simultaneously. They typically hold stocks, bonds, currencies, futures contracts, and commodities like gold bullion.
  • Investment funds: an investment fund allows you to enter a portfolio of securities, such as stocks or bonds, in both the national and international markets. Depending on their time horizon, they are classified as short, medium, or long-term.
  • Gold: Gold is held as a reserve for the value of currencies in circulation by many central and commercial banks worldwide. The precious metal constitutes a safe haven asset during times of inflation since its value withstands the onslaught of the market.
  • Diversification: this is the concept of not “putting all your eggs in one basket.” diversifying is investing in mixed funds, which contain both variable income assets and fixed income assets; or investing outside the jurisdiction of origin, the advantage of which is local events will not impact that said savings.

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