The financial world has become faster and more complex. Is this placing excessive demand on society or are we mistaken?
You've dedicated yourself to educating people about financial issues. Why is that and what is your teaching approach?
I advise everyone to save using equities: invest in equity funds or even in individual securities, but do this with a long-term time horizon of at least ten years.
The Swiss learn how to save from an early age, but this is no longer sufficient today. The consumer world is a state of exultation and many people have unrealistic expectations about pensions and their benefits. Therefore, private pensions are becoming increasingly important. What is your advice to the small saver?
What does broad diversification mean? Is gold, for example, a fixed component of a diversified portfolio for you?
I focus strongly on the Swiss market, because I – unlike many of my colleagues – believe that the currency risk is too great to go "too international."
Is the diversification within the Swiss market sufficient or do you recommend investing globally?
And how do you feel about saving in the 3rd pillar?
Should you buy into your own pension fund?
Do you still invest your personal money in cash and shares? Or have you changed your strategy due to the current interest rate environment?
You reached the AHV retirement age last year. What are your personal plans in terms of saving and continuing to work?
The most important tips
- Get an overview of all your obligations and upcoming expenses. Plan your budget actively!
- Put aside enough in fixed-interest investments (cash and bonds) to cover your obligations – that's what I call saving – and invest the remaining (long-term) unrestricted assets in equities (funds and individual securities) – that's what I call investing.
- Diversify widely and invest for the long term – don't look for short-term profit.
- Be disciplined, pay particular attention to the cost of investment and keep your nerve.
- Only buy what you understand. Invest in your knowledge and above all trust yourself.
Dr. Erwin W. Heri
Dr. Erwin W. Heri held management positions at various financial service providers (banks and insurance companies) over many years. At the same time he was, and still is, Professor of Financial Theory at the University of Basel. He has written numerous books and articles on financial and investment issues. As founding partner of the financial education platform www.fintool.ch, Erwin W. Heri wants to promote financial education and enthuse people about private pensions.