I am looking for a balanced investment for a medium term (max 8 years).

At the beginning I looked at bonds in their different forms, but actually they offer almost the same interest rate as saving accounts (I live in Switzerland where rates are extremely low to contrast the Franc's strength).

Afterwards I decided to start looking into strategic funds, since they allow a good grade of diversification and offer various level of risks (I would opt for a Balanced profile: 45% Bonds and 45% Shares plus divises). But even in this case yields are slightly higher than a saving account (my current saving account gives 1.25%).

Therefore are stocks the best investment at the moment? Considering the market price of many "big" names it seems so. As an example, UBS Bank has a price of 11.3 CHF and some months ago was around 60 CHF.

My interest now would be to investigate Asian markets and more specifically companies in the IT field. In this case, would umbrella funds be the best type of investment? This would allow me to widen the base of the investment in the same sector, while still keeping risks reduced if compared with investing directly in shares.


For the sort of medium term horizon you mention, a balanced portfolio weighted more towards high grade corporate bonds but with at least 20% stocks would be a safe bet. The key principle to remember for any horizon beyond short-term (less than 1 year) is diversification. In your case, being based in Switzerland, I encourage you to look past companies and bonds available in Switzerland and diversify into other countries and currencies. Home-bias is one of the most widespread and pernicious influences on the personal portfolios of those living in smaller countries. I also would stay away from trying to make sector/country timing bets, such as Asian markets or IT, unless you have special knowledge.

UBS, by the way, is not representative of shares in general. Right now the markets are very worried about the hidden exposure of European banks to Greek government debt. This may or may not resolve in favor of UBS one day, but right now an investment in UBS (or any other European bank) is highly speculative and not appropriate for the average investor.

  • +1 Good answer. I will wait some time before accepting it, in order to give someone else the time to add his/her contribute. BTW thanks for the moment! – Francesco Sep 2 '11 at 15:25
  • @Luca Of course, no problem and thank you for contributing to the site. – Tal Fishman Sep 2 '11 at 15:35

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.