The markets today, Monday, show an unappetizing outlook at time of writing. Most European stock indicators are in the red, dragged down by COVID 19 increases, fears and restrictions, BREXIT doubts and a slowing recovery. Most major North American stock indicators are firmly in the red, also dragged down by renewed COVID 19 fears, spotlighted by record numbers of new virus cases and uneasiness over the stimulus stalemate in Washington.
These indicators can change during the runup to the opening bell and at any time afterwards, as happened last week.
It’s not all doom and gloom. There are some promising reports scheduled for this week, including Pfizer Inc. and Microsoft Corp. tomorrow and other tech stocks later in the week. Boeing Co. and General Electric appear poised to report losses on Wednesday.
In previous editions of this column I have examined some options for those worried about the impact of the Washington follies on their investments. Investing a part of a portfolio in Switzerland is another option that merits consideration. “ (It) continues to be viewed by international investors around the world as a safe place - perhaps the safest place - to hold assets for global investment management diversification and long-term preservation,” says Anne Liebgott, founder of AW Switzerland in Davos.
As political and economic stresses continue in the United States, Liebgott suggests that an increasing number of investors may seek the security of Switzerland for a portion of their assets.
Liebgott points to Switzerland’s continued political stability, monetary security, strong currency, sophisticated financial system and blue-chip wealth management expertise.
As well as stability and safety, Switzerland has an element of comfortable familiarity. It has approximately 50 wealth management advisors registered with the United States Securities and Exchange Commission.
It also has considerable bench strength. Ratings agencies such as Moody’s, Standard & Poor’s and Fitch rating agencies have issued Switzerland a AAA-rating with a stable outlook, a status that appears immune to problems in nearby countries.
While other countries and financial institutions are being downgraded, Switzerland has performed well as the woes of other countries have grown and its well-renowned neutrality provides a shelter from political turmoil.
Moreover, Swiss banks have significantly increased their capital and liquidity buffers over recent years, and they are well equipped to handle uncertainties.
There are some limits to the offering of a welcome mat. Those contemplating the move need minimum available investible capital at US$100,000, though Swiss wealth managers typically look for clients with US$250,000, US$500,000 of $1 million.“(So )there is a Swiss wealth manager for just about every kind of U.S. investor and not just ultra-high net worth clients,” Liebgott says.
There is usually no charge for the actual account opening and the Swiss wealth manager will charge a management fee which varies between managers. For those managers registered with the SEC, their fee schedules are part of their registration and can be researched ahead of time. There will also be some custodian fees charged at a bank and those also vary and can be researched ahead of time.
As with other strategies for reducing exposure to the Washington follies and the COVID 19 crisis discussed in this column, investing a part of the portfolio in Switzerland merits consideration but is not suitable for everyone. An interested investor should seek expert counsel with a domestic financial advisor even before taking the first step.