Swiss Bank Investing Recommendations
Equities forecasts
Analysts at virtually all Swiss banks agree: equities should be the basis of an investment portfolio. The financial services conglomerate Credit Suisse advises investments in Japan, Australia and Western Europe.
Shares of leading companies in highly developed countries are a profitable investment. Therefore Credit Suisse predicts growth of prices on these shares and accrual of income from dividends.
Experts from the Swiss bank Julius Bär say the market index of Swiss blue chips will rise in the near future, but the Nikkei 225, one of the most important indices of the Japanese stock market, will drop amid weakening of the national currency.
In the euro zone Swiss analysts have a clear view on the growth of German Dax index, driven by the success of German exporters, predicting all stocks of the companies, included in the Dax index, to grow. As for the U.S. stocks, investors should be guided by the Federal Reserve’s decision on the refinancing rate.
Bond forecasts
The analysts of Swiss banks were divided as to forecast the dynamics of the bond market. Financial holding UBS advises to pay attention to high-interest bonds of companies from the U.S., but notes that, overall, this type of securities will not play a major role in the stock market. Specialists of another bank think that bonds of the leading European and Swiss companies, denominated in euros and francs, will help preserve funds and gain comparatively small profit.
Coutts & Co Ltd Switzerland recommends to have a closer look at Indian companies as well as companies from Southeast Asia, where profit is often 1.3 times higher than from American bonds. But in this case there is a certain amount of risk.
Commodity market
Most specialists think that in the near future the raw materials market will have high volatility and low profit probability. Stable strong dollar rate, low inflation in developed countries will keep gold prices down. As for the price of oil, there is a possibility of a slight increase in the cost of a barrel compared to the previous period. Nevertheless, the price of oil will remain quite low.
The real estate market
The question of whether or not to invest in real estate is decided on a case-by-case basis. The financial capabilities, the need and the location of the property are taken into account. Experts recommend caution with such an investment: the real estate market in developed European countries of Switzerland, Germany and Spain remains unattractive at this time. Apartments and houses to maintain very expensive, and to reach self-sufficiency through the lease is virtually unrealistic.
Forecasts and recommendations on the countries
EU countries
There are economic problems in some EU countries, their competitiveness is falling. In order to accelerate economic growth, the European Central Bank decided in March 2015 to buy bonds of eurozone countries. The program of buying government bonds is planned until September 2016.
In this regard, Swiss banking analysts believe that the EU countries, thanks to the ongoing reforms, foreign exchange liquidity and lower energy prices, will record an average increase of 1-1.5%.
However, it is worth remembering that the interest on deposits in euros remains quite low.
United States
The U.S. economy is projected to grow. Experts attribute it to falling unemployment, a small but steady upward trend in wages, increasing purchasing power of the population and acceptable energy prices.
The U.S. dollar is still the world’s most sought-after currency and the most attractive object for investing money. Investments in the dollar, according to Swiss analysts, will pay off in the near future.
Developing countries
Investments in these countries have a certain risk. However, in recent years, they attract a huge amount of foreign money.
Experts from Swiss banks believe that it is dangerous to keep savings in the Chinese currency, despite the fact that the Chinese economy is booming. The Chinese real estate market, which was considered the most important sector of the economy, has reached a dangerous crossroads: excessively inflated housing prices have slowed the pace of sales. In addition, corporate debt defaults remain likely, and social tensions are rising.
India is singled out as a more attractive investment destination. It shows a high rate of economic growth, accordingly, there will be prospects of obtaining serious monetary gain. However, do not forget about the possible unforeseen risks.
Switzerland
Those who are interested in Switzerland as a destination for investing their own money are a little luckier, as the information is encouraging. The World Bank and the Organization for Economic Cooperation and Development forecast that the Swiss economy will grow at a higher rate than the eurozone average. This is attributed to an increase in exports abroad, the largest item of which is the chemical and pharmaceutical industry. Domestic consumption, which mainly concerns the real estate sector, will decrease.
Savings in foreign currency can simply be kept at home rather than in a bank. Only highly quoted currencies such as the US dollar, the Swiss franc, the euro, and the English pound sterling are suitable for this purpose.
More sophisticated financial instruments, such as stocks and bonds, should be kept in a bank. Therefore, it is worth taking care not only of the liquidity and reliability of your investment portfolio, but also of whether you should trust that particular bank. The palm of the world market is held by Swiss and British banks.
