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Important tips & tricks for pillar 3a and vested benefits. Do more with frankly.
Market turbulence – what now? Market turbulence - what now?
Price corrections and downturns have always been part of the stock market experience, and cannot be predicted. The important thing is not to lose focus on your personal investment horizon and to avoid panic selling.
Focus on your personal investment horizon and avoid panic selling.
What do the market turbulences mean?
Crises and market corrections have always been part of economic life. They happen every now and again at irregular intervals. It is also impossible to predict how far share prices will fall and how long they may take to recover.
A glance at history shows that crises are usually followed by longer periods of recovery. For example, after the 2008 financial crisis the Swiss Performance Index (SPI) only returned to its pre-crisis level in 2013. In the case of the recent shock caused by the corona pandemic, prices recovered within just a year. So you can sit tight and wait out any crises, because time is on our side.
Market turbulence is part and parcel of investing, and brings opportunities with it. These fluctuations can be managed better with long-term investment plans and diversified portfolios.
This means it’s worth staying calm.
Current situation
Disappointing US economic data and a weaker earnings outlook for the tech giants have caused global equity markets to fall since mid-July (-8.2%). On top of this, market participants fear that the US Federal Reserve could come too late with its interest rate cut announced for September to ensure a soft landing for the economy. On the other hand, both bond prices, which have proved their worth as a diversifier, and the yen have gained in value after the Bank of Japan surprisingly raised its key interest rates to 0.25%. Swiss real estate funds were also able to escape the correction and report stable prices.
The portfolios have therefore posted losses in recent days, which have been larger among portfolios with a high equity component. Since the beginning of the year, however, all portfolios have continued to report gains in the single-digit percentage range. Volatility on the financial markets is likely to remain high for the time being. As neither a massive economic downturn nor a slump in profits is expected in the near future, the slightly defensive and diversified positioning of frankly investment products is considered a good starting point for exploiting opportunities.
Last updated: August, 2024
What are the biggest mistakes you can make when investing?
When investing, mistakes can happen which have a negative impact on the accumulation of wealth. Some of the most frequent mistakes are given below:
Acting emotionally
Acting emotionally
Falls in share prices and the resulting losses can create major doubts and lead to panic selling. This is understandable but don’t get carried away by market fluctuations. If you sell your investments when their performance is negative, you’ll definitely have made a loss. On the other hand, if you leave your assets alone or even dare to buy more, your assets could recover. Patience usually pays off.
Avoid making decisions based on emotion!
Waiting for the perfect moment
Waiting for the perfect moment
It’s not just when you buy that’s key, but also how long you hold on for. Long-term strategies usually pay off better than waiting for the right time to invest. If you wait for the perfect moment, you might miss out on valuable market opportunities. Or put briefly, it’s time – not timing.
frankly Tip: Getting in and out at exactly the right moment is a pipe dream. This is why we recommend paying in your planned annual pillar 3a contribution on a staggered basis and investing it, e.g. by standing order. This will smooth out the cost price and stop you from letting your emotions get the better of you.
Forgetting the costs involved
Forgetting the costs involved
| High costs can significantly reduce your return. Remember, every franc you save is money that you can reinvest and make work for you. Take note of the costs associated with your investments. |
Insufficient diversification
Insufficient diversification
| In order to spread risks, you should invest your assets in different companies or securities. frankly offers you various investment products which are invested in different asset classes. Since these investment products are already very well diversified, you don’t need to be an investment expert and spend a lot of time putting together a suitable portfolio. All you have to do is decide how much risk you want to take and choose the right strategy. It’s as easy as that. |
