North American markets today, viewed several hours before the 9:30 a.m. EST opening, appear poised to start on a mixed footing with some major indicators in the red at time of writing, suggesting a winding down of a record-breaking November.
However, the NASDAQ has been shifting back and forth between green and red while I assemble this column. Worries over virus surges counterpoint with optimism about vaccines but that optimism is tempered by factors such as a questioning of AstraZeneca plc’s test results. In the background and unclear is the net potential impact of Russia’s plan to export vaccines at bargain-basement prices, a move which -- if it actually crystallizes -- threatens the profits of Western vaccine manufacturers and therefore their suitability as investments.
The European markets are open at time of writing but indicators there are also mixed. In fact, the FTSE 100 and DAX slipped from green to red to green again while I was writing this column. The impending deadline for a BREXIT trade deal adds an extra layer of tension to vaccine and pandemic concerns.
This will be a busy week for investors looking for clues about the fallout of the pandemic and the outlook for 2021
Amongst the beneficiaries of the pandemic, Zoom Video Communications reports third quarter results today.
It is reasonable to expect an increase in revenues partially triggered by its success in converting customers form the free plan to paid status.
Zoom has benefitted enormously from the work-from-home and stay-at-home constraints induced by the pandemic. It will be interesting to hear whether the company projects continued growth for the next quarter.
Other reports this week include Hertz Global Holdings, Kroger Cos. Dollar General Corp., Kroger and Dollar General can be expected to provide positive results, but Hertz’s numbers will be unpleasant.
For a near-to-last look at the pre-Biden economic situation, Federal Reserve Chairman James Powell and outgoing Treasury Secretary Stephen Mnuchin are expected to testify before the Senate Banking committee.
Also, this week Canadian banks report and may show drops in revenue, driven by several factors directly and indirectly related to the pandemic, including margin squeezes, deposit surges and slowed loan growth. That may lead to some drops in valuation but will not seriously erode share prices.
Bank executives’ comments on loan loss provisions and their outlooks for 2021 will at least be worth considering.
It is reasonable to believe that the volatility of North American and European markets will continue for some time. For those who want a partial break from it, deploying a portion of assets to a Swiss investment bank might provide an answer. I dealt with the principle of this strategy in a previous edition of this column and today will look at the some of the benefits of such a move.
A Swiss account might bring with it a contribution to the ‘sleep-at-night’ requirement of investing. “Despite the ongoing pandemic crisis, or more so because of it, the Swiss private wealth management industry maintains its top ranking as international investors continue to seek Swiss wealth management services, in the atmosphere of long-term security that Switzerland has to offer,” argues Anne Liebgott, founder of A W Switzerland.
Liebgott highlights differences in the Swiss investment experience, pointing to a Swiss bank’s organization, culture and social outlook. “They (the banks) adroitly strike a balance between the "global" and "local" aspects of the company culture, with internationally-driven perspectives coupled with a sense of long-term Swiss stability and reliability."
There are no Swiss taxes as such, but a Swiss bank account is taxed in the same way as an American bank account. There are, however, some tax planning strategies available including private placement life insurance, a complex insurance policy structure through which assets and earnings accumulate on a tax-deferred basis until withdrawal.
Swiss Re Institute’s Sigma Resilience Index claims that Switzerland is the world’s most resilient country and best equipped to handle the pandemic crisis and its aftermath while ratings agency Fitch Group renewed Switzerland’s AAA rating with stable outlook.
A think tank group consisting of respected publication US News & World Report, marketing company VMLY&R and blue-chip business institution Wharton School of Business at the University of Pennsylvania, places Switzerland above average in several categories including business conduct and quality of life.
No one is suggesting that an investor transfer a large proportion of total holdings to Switzerland but international and jurisdictional investment diversification can complement a North American-centric investment portfolio and contribute to mitigating risk as well as taking advantage of active Swiss wealth management expertise, Liebgott says.
However, while investing through a Swiss account has all of the advantages discussed here and more, it is not an isolated strategy. It is best viewed as part of an overall investment diversification strategy which takes all of the pressures of North American markets into account.
Disclosure: I do not own any shares in any company mentioned in this column.