Hi there
Since I entered this world just recently, I was looking for a second opinion on the following matter to understand if I’m doing and thinking things correctly.
I’m 33 M living in Switzerland. I can save something around 2k a month after taxes, expenses and third pillar (3a). I’m currently placing 1k/month in a savings account - for short term goals (within next 3/5 years) - and 1k/month in Swiss and (mostly) Global ETFs - for the long run.
**First question: Is putting 1k in a simple saving account the best idea?**
My reasoning was driven by, I think, no alternatives:
• No ETF on Swiss Gov Bonds (of any duration): Inflation is close to 0%, insterest rates from BNS are 0% and even expected to become negative again. Would be a blood bath if rates increase and since already expected to decrease they are already priced correctly.
• No ETF on CHF Hedged Global Gov Bonds (any duration): BNS rates at 0% means to pay the hedging as much as the interest rates of the central bank of the other currencies (FED, BCE, BoJ, etc..). I would get rid of currency risk but would get nothing anyway.
• No Currency ETF: same reasons as above. Rates at 0 and CHF too strong.
**Second question: Is investing in mostly global ETFs -** 45% VOO, 35% VXUS, 10% DFAX ( I like the Dimensional approach of it), 10% SPISI - **the right choice ?**
My thoughts were:
• In the long run World beat CHF. Despite stronger and stronger CHF, world highly outperformed CH.
• 10% still in CH Market not to be completely exposed to currency risk in case of unexpected emergency (in case I’ll ever need to withdraw from here). I don’t want to overweight CH either since normally it would be 3/4% of VT)
• My other 1k in the saving account is anyway cash - and inflation is close to 0% - so here I can go fully on equities.
• Reducing volatility increase long term gains, but I have no means to reduce it with bonds or others as explained earlier.
As I just recently started studying, I feel like I’m missing something easy yet important.