Investing for beginners: How do I get started?

Do you want to invest your money but have little experience? We show you step by step how beginners can approach investing in Switzerland.

At first glance, entering the world of financial markets seems overwhelming. But investing isn’t just for professionals. This guide shows you how even beginners without expert knowledge can invest successfully.

Do you still want advice on your journey as an investor? We’ll be happy to support you – it’s easy and there’s no obligation.

Why invest money at all?

There are three main reasons why you should invest your money:

1. You want to build up assets.

Investing money opens up opportunities to make a return. Persistently low interest rates make savings accounts with a bank unattractive – if you want to grow your money, you have to let it work for you. The sooner you get started, the better: A long investment horizon is one of the most important factors for successful investing.

2. You have specific financial objectives.

Are you toying with the idea of a second education, a trip around the world, or buying your own home? Maybe you’re saving to start a family or want to be financially independent in retirement. These dreams can come true if you consistently follow a well-thought-out investment strategy.

3. You want to counteract inflation.

Housing, energy, food – everything is becoming more expensive, even in Switzerland. This reduces the purchasing power of your savings. Taking a passive, wait-and-see approach means accepting a gradual loss of value. However, by investing systematically and regularly, you can offset the effects of inflation.

Which form of investing is right for me? 

That depends on your preferences and needs. Whether equities, real estate, or commodities, every asset class has its strengths and weaknesses. If you don’t want to choose a particular asset class, you should invest in funds or ETFs. These are a mix of different asset classes – an attractive option, especially for newcomers. 

What are the characteristics of the most important asset classes?

The table provides an overview of the key strengths and weaknesses of each asset class.

What is the magic triangle of investment about?

The magic triangle of investment describes the tension between the three objectives of return, security, and liquidity – which influence one another and can never all be optimally achieved at the same time.

Which form of investment is right for you therefore depends on  

• how much liquidity (availability) you need/want, 
• how much security (low risk of loss) the investment should offer, and 
• how much return (profit) you expect from it.  

In other words, there is no such thing as a perfect investment. Every investment is a trade-off between liquidity, security, and return, meaning you have to compromise on one of the three factors. 

Scenario 1: Savings account 
You want low risk and high availability. In exchange, you are forgoing a high return.

Scenario 2: Real estate
You opt for a higher return with a lower risk. In exchange, you do not need to be able to access your investment quickly.

Scenario 3: Cryptocurrency
A high return and good availability are important to you. In exchange, you also take on a higher risk.

Should I stick to traditional saving or invest?

That depends on your overall financial situation and your needs in terms of security, returns, and availability. The table below highlights the main advantages and disadvantages.

How should I invest my money?

Beginners can follow this five-step plan.

Step 1: Understand the basics

Familiarize yourself with the key terms and mechanisms, especially the magic triangle (see above). Expand your knowledge.

Step 2: Set objectives

Answer the following questions for yourself:

• Why do you want to increase your capital? 
• What is your target amount?  
• When do you want to have reached your goal? 

Step 3: Clarify framework 

Think carefully about what is possible and appropriate in your situation:

• How high is your risk tolerance?
• What investment period are you planning for and how important is availability to you?
• What is the amount of the investment, i.e. how much money can you regularly pay in?

Step 4: Choosing investment forms

If you’re still unsure about the choice of investment forms, it’s easier to get started with funds or asset managers.

• Funds are investment products in which the money of many investors is pooled and invested professionally. A distinction is made between passively managed ETFs or index funds (low-cost) and actively managed investment funds (higher fees). 
• Discretionary management means individual support and management of all your assets by professional managers. 

Whether fund or asset management: The aim is always broad diversification. This means that many different investments are bundled to avoid a cluster risk (see infobox). 

Step 5: Stay on track 

Successful investment requires, above all, patience. Continuous, long-term investing helps to balance out market fluctuations and build up assets steadily. 

• Review your strategy if necessary: Especially if your life circumstances or your goals change, the question arises: Is the chosen investment strategy still right?  
• Benefit from compound interest: The interest earned is constantly reinvested and in turn earns interest – over the long term, your assets grow exponentially. 
• Take advantage of the average price effect: Regularly investing at different prices reduces the average acquisition cost over the long term. 

Frequently asked questions

Summary: Getting started is easier than you think

Investing doesn’t have to be a complicated issue. Getting information early and starting gradually creates the right conditions for accumulating assets over the long term. It’s important to weigh up the risks and opportunities realistically and choose a solution that suits your own situation. If this article has provided some guidance, then you’ve already taken the first step.