Investment Funds for Future

Finance, Taxes, Banking, Insurance and Retirement
1
Hi all,

I have a two-year-old daughter and I want to plan for her future. As I've been researching, I've come across funds as a good investment option. I've been specifically looking for low-risk and high-profit funds and have found some interesting options.

Is there anyone else here who is also interested in these kinds of investments? I would love to share information and knowledge among us.

My goal is to invest for the long term, around 20 years, and I am particularly interested in precious metals such as gold, platinum, palladium, and silver. I'm also considering ETFs and a bit of cryptocurrency. Currently, my initial capital is 10,000 CHF, and I plan to add 300 CHF every month.

Looking forward to hearing from fellow investors and discussing our strategies!

2
you can buy gold and silver ETFs. they are not necessarily what i would have imagined when you said low risk and high reward.

3
It's very difficult to look into the future that far.

As for precious metals: they are not investments.

The bet with ETFs is that the companies in there will hopefully be able to adjust their businesses to smaller and larger micro- and macroeconomic shifts that are invariably bound to happen in the next 20 years.

These are, in no particular order and severity of repercussions on current market-players:

- de-dollarization

- decline in China and Japan due to the age structure of the population

- rise of India

- prolonged economic downturn in Europe due to age-structure, direct and indirect costs of the proxy-war in Ukraine and other problems accumulated in the last 25 years, combined with political turmoil

I would say you could buy e.g. 1 coin of Krueger-Rand per year, at the end of the year, if you have money left you feel you can spend on such an item instead of investing. I'm not sure about the insurance situation of precious metals stored at home. So maybe take into account renting a lockbox.

I would not buy "paper-gold". Either the real deal or just don't do it at all.

4

Low risk AND high profit? If this existed everyone would be investing in it, and it would cease to be high profit anymore. And it is not even easy to agree on what is low risk: some would say buying a property is high risk...

5
Ditto crypto!

Low risk high reward isn’t a thing! You can optimise the risk reward profile, but generally for a higher reward you need to accept higher risk that you don’t get any reward.

For a 20 year time horizon I’d be looking at a low cost global equity tracker. A US domiciled fund appears to have the the lowest fees and ability to reclaim withholding taxes. Vanguard total world stock would be my choice.

If you are going to invest 300 a month, I would only do it on a quarterly or half yearly basis to keep transaction costs to a minimum.

6
First of return is always associated with risk, nobody is going to pay you a high return to take on low risk - that just does not happen. Next all of the asset classes you mentioned are high risk ones, so your approach to achieving the objective just does not align with the objective. And on top of this adding 300 per month will increase you transaction costs....

Keep it simple, pick a blue chip index, save 300 each moth and then say twice a year add it to the fund.

7
I agree with Jim on this one.

If I were doing this (and I may be soon for my kids) I'd put it all in something like and S&P 500 Index or Total Market ETF, and just keep plowing the money in. And avoiding transaction fees is a great idea as well.

8
Thank you for the information you provided.

It is indeed possible to achieve a balance between low risk and high profit, although it's important to acknowledge the uncertainty of the future, particularly over a 20-year timeframe.

Cryptocurrencies, such as Bitcoin (BTC), are known for their high-risk, high-reward nature. Despite this, I have decided to invest in Bitcoin, but I will limit my allocation to a maximum of 10% of my capital to manage the associated risks.

Examining historical trends, gold has demonstrated significant growth over time. For example, the price of gold was $350 USD per ounce 20 years ago and has now reached $2000 USD. Similarly, silver has risen from $4.5 USD to $23 USD per ounce. Therefore, I am considering allocating 50% of my capital to investments in precious metals.

Moreover, I am aware of the continuous development in technology and its impact across various industries. As part of my investment strategy, I plan to invest approximately 40% of my overall portfolio in prominent tech companies such as Microsoft, Meta (formerly Facebook), Tesla, biotech firms, AI companies, clean energy enterprises, electricity providers, battery manufacturers, and others.

Your suggestion of renting a lockbox and acquiring physical gold and silver bars is intriguing. Additionally, implementing a strategy of investing on a quarterly or half-yearly basis to minimize transaction costs is a wise idea.

I will also conduct research on Vanguard and Krugerrand to explore their potential as investment options.

As someone with a background in software engineering, financial matters can be somewhat unfamiliar to me. Therefore, I would greatly appreciate your advice regarding reputable banks or companies, apart from Vanguard, that offer fund management services.

While I currently have an account with PostFinance, I am uncertain about its suitability for managing my investments. It is crucial for me to identify potential alternatives that align with my long-term goals in securing a better future for my daughter.

Thank you once again for your replies. Your inputs are highly valuable to me, especially as I navigate this unfamiliar territory.

9
Keep it simple, otherwise it could bite you (and your future) in the ass.

Especially given you said you are not that deep into the investment/financial topics.

Being successful in deviating from "the average" requires high skill and plenty of luck.

I hope you don't want to base your kid's future on luck.

Over longer time horizons such as 20+ years, a broad equity fund makes most sense (according to current research at least).

Pick VT, buy regularly, and use the rest of your time you'd have wasted on other experiments - with your child.

Doesn't mean you cannot gamble a bit with some other highly volatile assets, but treat it as a gamble, not huge chunk of total.

10
I avoid China altogether. It has a terrible track record in upholding property rights and enforcing contracts, and the fact that foreigners can only hold less then 50% leaves you open to all kinds of legal shenaniganisms. On top of that, many US-listed ADRs (including Baidu, Tencent, Alibaba, etc), with their VIE structure, represent nothing more than IOUs by Cayman Islands companies promising to hold the shares your ETF says they hold. The recent crackdown on tech alone should have everybody run, nothing good can come from a government that works against your interests.

Africa is far too unstable and corrupt to be investable. South Africa for instance, its former locomotive, looks ever more like a failed state. And of course there's the far too common civil wars and government overthrows all over the continent, the Arab Spring was no help either.

Japan is essentially a bet on it growing its export sector. This can work, but with a shrinking population and workforce pretty much every other macro factor is stacked against you. 220% indebtedness (and continually increasing) would scare the sh1t out of me, it's only a matter of time that this bomb explodes.

11

We have an account with Avadis for each child and invest 100% in equity:
https://avadis.ch/loesungen/private-anleger/anlagefonds

The account is in their name which gives them full access when they turn 18.

12
I spent over thirty five years working in the Swiss financial services sector in one form or another. And yes it is possible to optimise a portfolio in terms of risk versus return, but this is not it. There are plenty of textbooks and research papers on the topic, but none of the reputable ones will tell you that putting more than say 7% - 10% of a portfolio in the alternative assets classes represents a low risk portfolio.

You can't invest in Bitcoin or any other crypto currency for that matter, you speculate in currencies and in this case unregulated ones. At 10% of your capital you have already left the realms of well optimised portfolios.

And then there is precious metals. Well at least this in an alternative asset, but at 50% of you capital, it is way of the charts in terms of the construction an well optimised portfolio.

And the remaining 40% you intend to concentrate in tech stocks, one of the most difficult sectors to make long term forecasts and pick winners.

What you actually end up with here is a portfolio where 60% of it's value is based on fear and greed not the economic progression of the developed world and the remain 40% concentrated in a single sector rather than being diversified. And this is were the study of behavioural finance comes into play - you'll have a very volatile

portfolio to deal with and research shows that most people is such a situation will not be able to hold their nerve and stay the course in such situations.

When you are required to make a long term investment, you keep it as simple as possible so it is easy to understand, you pick investments where it is easy to forecast the long term outcome and you diversify the risk in case you get it wrong.

A good example of what I'd be stuffing into such a portfolio rather than the tech stocks would be US title insurance. It's as dull as ditch water, but easy to predict and very profitable. Americans will always have to buy title insurance because lenders and peace of mind require it, the maximum claim runs to a couple of hundred bucks which is often less than one years premium, it's a mono line insurance which means when you invest in it you are not exposed to any other insurance risks. And every time there is bad news in the construction or insurance sectors it goes on sale, so you get to pick up cheap.

Now I know what I'm saying will most likely have no impact on what you'll do because I have seen countless people come through the office with the same approach and in most cases they'll be luck to come out with the money they put in.

13
Thank you once again for providing me with important and useful information. I have greatly benefited from all of your messages.

While 20 years may seem like a long time for forecasting, I understand that it doesn't necessarily have to be exactly 20 years. What I meant was that I am looking for long-term investment opportunities.

I prefer to avoid investing in companies based in China, India, and similar countries. My focus is primarily on companies located in Europe and the US. Perhaps Japan could also be considered, although their aging population is a concern.

I appreciate your recommendation for the company Avadis. I will definitely look into it.

@Jim2007, thank you for sharing your valuable experience. Your experiences hold great significance to me, as they provide insights that I can learn from. The fact that you have experience in this field is particularly important, and I value your perspective. The reason I mentioned tech companies is because I work in this field and have some ability to predict future trends, such as advancements in AI or the development of autonomous cars.

I'm not familiar with US title insurance, nor have I had any experience buying stocks from the US. Could you provide more details about US title insurance if possible? Also, should I always monitor the price and buy when it's low? My intention is to invest in ETFs, stocks, or other assets and hold onto them for a long time, following an "invest and forget" strategy.

By the way, thanks to AI, I have created a table listing comparable funds and I would like to share it with you.

I would greatly appreciate it if you could provide your input or ideas regarding the table I have created.

14
You have a list, but it is no better than picking one of a brokers list of available funds, using a couple of filters. I got involved in my first finance related AI project back in the 90s and from my perspective we are a long way from being at a point where it could be regarded as anything more the experimental. If you subscribe to the efficient market hypothesis, which I don't, then it is kind of pointless exercise in the first place and if you don't then you are actually trying to find a hidden edge that is out of reach of what AI type technology can provide.

You are not investing that much money, so pick one international blue chip index, which ever one you like and dump it in there. You are going to end up with more or less the same exposure in terms of sector, geography and FX, as they will all have more or less the same constituents.

15
Thank you for sharing the message with me. As a beginner with limited knowledge in finance, I appreciate your insights. However, it's important to note that I am still learning and seeking guidance on investment strategies.

However, as a beginner, I would greatly benefit from a more comprehensive plan tailored to my specific financial goals, risk tolerance, and time horizon. If possible, I would appreciate further advice or steps to consider when constructing a diversified investment portfolio. It would be helpful to understand how to assess different funds, evaluate their performance, and manage potential risks associated with investing.

Do you have any suggestions on where and what I should invest? Should I focus solely on one international blue-chip index, or should I also consider diversifying my investments?

16

I found a great article

https://investinghero.ch/investing-in-switzerland/

17
Low risk and high profit. Don’t we all want that?

Assuming this is a long-term investment I don’t see why you shouldn’t take more risk to be able to maximise your profits.

Otherwise, have a look at the three fund strategy (Bogle). Or consider simply buying a total market fund such as VT (or VTI for US-only), forget about it, and look at your account in 20 years.

18

Thank you for your advice. I agree that considering more risk in a long-term investment can potentially lead to higher profits.

I'm curious about cryptocurrencies, individual stocks of high-growth companies, emerging markets funds, or sector-specific ETFs focused on industries like technology or biotech.

Do you have any other recommendations or insights on similar high-risk, high-reward investment opportunities that I could consider?

In regards to VT (Vanguard Total World Stock), I did notice that its historical performance over the past 10 years shows a return of 8.94%, and since 2008 it has returned 6.82%. While these numbers may not indicate exceptionally high returns.

19
I'm a bit confused here -

Is your goal to invest in a safe way to have a 'fund' available for your child for when they need money to pay for university, or as a 21st birthday present or similar ?

Or is it to gamble for the next 20 years in the hope that you 'win' in the end ?

So much can happen in that time....

And either way, calling it your child's money is not a way to avoid taxes.... even if you put away some savings 'for your child' it's considered yours.... unless you set up some sort of trust or similar, which is an expensive thing to set up from what I understand.

Personally, if it's about having money for to benefit your child then surely a 'high risk' strategy is not the way to go about that....

20
You need to be honest with yourself for the sake of your daughter at least, do you want to be in a situation in twenty years time to have say around 150k to spend on her future or do you want to gamble away the 10k plus an additional 3.6k a year in the hope of winning a 150k for her.

You are not starting out with a lot and you are not in fact adding much to it, but turning in to around 150k over 20 years is doable. Being able to spend even a 100k on a young adult, by then she will be past being a teenager, is really something, having to explain why you can’t is not so much fun.

Decide if you want to be an investor or a speculator.... I know several people including myself who retired at 55 through investing and a lot more who will be working to retirement age, if the current merger between CS and UBS does not get them, through speculation.