How to Invest in Google

Strictly speaking, it is not even possible to invest in Google, but only in its parent company. Google LLC and its previous subsidiaries now belong to the US technology giant Alphabet Inc. and are the flagship products of that company. Find out what you should know about investing in Alphabet in this guide.

What do I need in order to invest in Alphabet?

All you need in order to buy Alphabet stock in Switzerland is a stock brokerage account or custody account. You can open a basic custody account at most Swiss banks, but stock brokerage accounts from banks that specialize in online trading are usually cheaper. You can compare stock brokerage accounts using the online trading comparison on moneyland.ch.

Alternatively, you can also invest in Alphabet stock using Yuh or Neon, both of which are Swiss neobanks.

How high are the brokerage fees for buying Alphabet stock in Switzerland?

The size of the fees depends primarily on which bank you use. You normally pay custody fees and stock brokerage fees, both of which vary broadly between banks (see Table 1). Only the Swiss federal stamp duties are always the same, no matter which Swiss bank you use.

You can save a lot of money by comparing stock brokerage accounts on moneyland.ch and using the cheapest account for your needs.

Table 1: The five Swiss banks with the lowest fees for a 1000 US dollar investment in Alphabet stock

The comparison above is based on a 1000 US dollar investment in Alphabet stock and on a custody account balance of 10,000 US dollars. Only licensed Swiss banks are included in the comparison. Date: January 15, 2024.

The neobanks Yuh and Neon are a special case, as they do not charge custody fees. They are generally the cheapest option for investing small amounts of money (up to several hundred francs).

Table 2: The fees charged by neobanks for a 1000 US dollar investment in Alphabet stock

*You pay an additional 0.95 percent currency exchange fee. The fees shown in Table 2 do not account for Swiss stamp duties. The comparison above is based on a 1000 US dollar investment in Alphabet stock. Date: November 27, 2023.

Should I invest in Alphabet’s A stock or C stock?

If you want to invest in Alphabet, you can choose between two different stocks: The Alphabet A stock, and the Alphabet C stock. The main difference between the two stocks is in the voting rights. Only the A stock gives you voting rights at the annual general meeting. But apart from the absence of voting rights, there are no disadvantages to investing in the C stock.

Because both classes of shares give you the same ownership in the company, you should simply invest in whichever stock is cheaper. Between November 2018 and November 2023, the C stock even achieved a slightly higher return. But if voting rights are important to you, then you should get shares in the A stock. In some cases, your bank will decide this for you. For example, Yuh only lets you invest in the Alphabet C stock, and Neon only offers the Alphabet A stock.

There is also an Alphabet B stock. Holders of Alphabet B shares enjoy ten times the voting rights of A stock shareholders. However, the B stock is not available to the general public.

Which ETFs can I use to invest in Alphabet?

If you want to spread out your investment over more than one company, then you could consider invest in in an exchange-traded fund (ETF). These passively-managed funds are traded on stock exchanges, so you can buy shares in them using a stock brokerage account, just as you would buy shares in a stock. Funds have ongoing fees, which are shown as the total expense ratio (TER). ETFs typically have lower TERs than actively-managed mutual funds.

Alphabet is included in numerous ETFs, and particularly in ETFs that invest specifically in the technology and telecommunications sectors.

Table 3: ETFs with the biggest Alphabet components

Source: Justetf.com. Date: November 27, 2023.

Investing in Alphabet indirectly through an ETF results in a more diversified investment. But it is important to note that most funds only invest in once industry sector. So, while using ETFs reduces the risk of making a loss, losses are still possible.

How much money could I make with Alphabet stocks?

There is no sure way to accurately predict how a company will develop. That holds true for Alphabet as well. The only reference point is the company’s past performance. A look at historical data shows that the returns on Alphabet stock over the past five years were substantially higher than those of US stock market indices.

Table 4: Performance of Alphabet stock compared to various US stock market indices

Grundlage der Performance-Daten sind die Schlusskurse vom 21.11.2018 und vom 21.11.2023 sowie die USD/CHF-Umrechnungskurse der gleichen Tage. Quellen: investing.com (Index-/Aktienkurse), finanzen.ch (Umrechnungskurse). 

But high returns in the past are no sure indicator of continued growth in the future. Be aware that investing in the stock market always comes with the risk of substantial losses.

To date (November 2023), Alphabet has not paid out a single dividend to its shareholders.

What are the risks of investing in Alphabet?

When investing in the stock market, returns and risk are always intertwined. That means that you could make high profits, but you could also make big losses. A stock’s price can fall both over short terms and over the long term, with the worst-case scenario being a total loss. Focusing on past profits can result in investors making careless speculations rather than founded investments.

You can minimize the risk of losing money by spreading out your investment capital as broadly as possible. Ideally, your portfolio should include stocks in different regions and industry sectors. Funds like ETFs make diversifying your portfolio easier, but do not completely rule out the risk of losing money.

Alphabet’s stocks are denominated in US dollars. Make sure to account for the currency exchange risk. If the US dollar were to lose value against the Swiss francs, that would shrink you real returns.

What are the tax considerations of investing in Alphabet?

In Switzerland, private investors do not normally have to pay taxes on capital gains. Dividends paid out to shareholders are subject to a US withholding tax. You can claim reimbursement for part of this tax when you complete your Swiss tax returns. However, Alphabet does not currently pay out any dividends.

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