I’d just jumped from the transom of my rented speedboat into the surprisingly warm waters of the Zürichsee in Zürich, Switzerland, when my Apple Watch started to buzz.
My cousin was FaceTiming me from Chincoteague, Virginia, with some family news. We had a pleasant chat whilst I bobbed in Switzerland’s sixth-largest lake.
Then it hit me. This is the future … the one they’d been promising my generation since the 1960s. Instant global communication via video call.
I half-suspected I’d see a Schweizer fly past in a jet pack.
It’s wonderful when things work out the way we want them to … the way the experts predicted.
Given what I’d learnt from my Swiss investment-manager friends the day before, I couldn’t help but wonder whether those who’ve bet big on the U.S. stock market will feel that way in a few months’ time…
Swiss Stereotypes
Zürich is a place I’d like to spend more time.
I’ve been here the past few days with my family. After falling in love with this superlative city two years ago, I promised I’d take them for a visit.
There’s so much to do and see … the winding alleyways of the Altstadt (old town), parks and fountains galore, chocolate and coffee on every corner, open-air opera … and of course, the lake.
So, it wasn’t difficult keeping them occupied whilst I met an old friend … a private investment manager specializing in U.S. clients.
The Swiss stereotype is of cold, humorless efficiency. The stereotype of Swiss banking is that it is only for the über-wealthy. Both are dead wrong … except for the efficiency.
My money-manager pal Rob Vrijhof is a boisterous, fun-loving guy. But he’s also an expert in helping U.S. clients take advantage of the safest investment environment in the world.
Swiss Safety = Swiss Value
It’s true that Swiss banking was once all about hiding millions from the taxman. But nowadays it’s open to anyone. For better or worse, there are no more “numbered” Swiss bank accounts hiding the owner’s identity.
Rob’s company specializes in managing investment portfolios for U.S. clients. He helps them open a bank account at one of Zürich’s top banks. Then he invests those funds on their behalf. He specializes in Swiss and European equities, currencies, precious metals and other low-risk assets.
Most of these investments are solid, stable, long-term picks with high dividends and minimal drawdowns, like Swiss companies Nestlé (TLO: NESN-U.TI), Novartis (TLO: NVR-U.TI) and Glencore (LON: GLEN).
What sets these companies apart is their soundness. They dominate essential global industries with evergreen demand. They carry little debt. They don’t engage in silly financial engineering games. Their price-to-earnings (P/E) ratios are sane — Glencore’s is 12.65. Novartis’ is 11.76. The U.S. average P/E is over 30.
That means it’ll take you twice as long to earn back your investment in a U.S. company compared to a Swiss one!
Safer Than Houses
These days we’re conditioned to chase yield via price appreciation. That’s why many U.S. investors hold stocks that are absurdly overvalued by global standards.
To win, they must leave the stock market party before everyone else does. Remember how that worked out in 2008-2009?
Swiss asset managers don’t party with your money. They grow it safely, aiming for stability and long-term income. Above all, they don’t risk it on speculative plays.
That’s why Swiss investment portfolios are amongst the safest bets in the investment world.
Storm Warnings
When I rented a boat on the Zürichsee, the dockmaster told me the lake was ringed with early-warning signals to let boaters know when a storm was coming. Apparently, they can brew up fast. The winds whip down the narrow valley like a tornado.
Investment storms like 2000 and 2008-2009 come out of nowhere. The U.S. stock market doesn’t have any early-warning signals.
With the clouds of stock overvaluation, crazy financial engineering and massive government debt on the horizon, shouldn’t you be keeping some of your wealth in a safe haven like Switzerland?
As they say in this part of the world … jawhol!
Kind regards,
Ted Bauman
Editor, The Bauman Letter
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