With most investments, it is impossible to predict future returns in advance. Even experienced investors with profound knowledge of exchanges, financial markets, and investment strategies cannot accurately predict future performance. Inexperienced investors often shy away from riskier, but potentially more lucrative, investments.
Regardless of whether you are a beginner, a professional, a hobby investor, or a bank manager, you will always be wiser in hindsight.
I too cannot foresee which investment will perform the best in the future, so I will take a shot at reviewing the past year instead. My analysis is based on this question: If I had invested 10,000 francs at the start of last year, which investment would have increased my wealth the most?
To answer the question, I compared the prices of precious metals, the performance of various stock market indexes, and the average annual interest rate of Swiss savings accounts. My comparison does not account for possible fees and taxes, nor does it account for inflation. One should also bear in mind that as a general rule, your investment horizon should be much longer than just one year.
The results show that the US stock market, in particular, could have delivered substantial returns – largely due to the spike in market rates at the end of the year. With a return of nearly 40 percent after accounting for currency exchange costs, the US technology index Nasdaq 100 left the Swiss Performance Index (6.09 percent) and the Swiss Market Index (3.81 percent) in the shadows (see the table below). A 10,000-franc investment in the Nasdaq 100 would have transformed into nearly 14,000 francs by the end of the year.
Comparison of annual returns for 2023 based on a CHF 10,000 investment
| Investment vehicle |
Returns (accounting for
CHF currency conversion) |
Final capital |
| Nasdaq-100 |
39.82% |
CHF 13’982 |
| DAX * |
13.17% |
CHF 11’317 |
| MSCI World |
10.69% |
CHF 11’069 |
| SPI |
6.09% |
CHF 10’609 |
| SMI |
3.81% |
CHF 10’381 |
| Dow Jones |
3.36% |
CHF 10’336 |
| Gold |
2.17% |
CHF 10’217 |
| Swiss savings accounts |
0.54% |
CHF 10’054 |
| FTSE 100 |
-0.33% |
CHF 9967 |
| Silver |
-10.99% |
CHF 8901 |
| Platinum |
-15.79% |
CHF 8421 |
| Palladium |
-43.61% |
CHF 6203 |
* Performance index (accounts for dividends).
Possible investment fees and taxes are not accounted for. Source for performance figures and currency exchange rates: Finanzen.ch
Too much home bias could have cost you a lot of money in possible returns. That is particularly true for last year because Swiss stocks underperformed in comparison to the global stock market – at least compared to the MSCI World global stock index. The MSCI World gained 10 percent, accounting for the currency conversion into Swiss francs. The term home bias denotes the tendency for investors to favor investments in their home country.
Gold reached new heights, but gained “only” 2 percent
An interesting point revealed by my analysis is that gold, which has long been valued as a crisis-resistant asset, delivered a return of just 2.17 percent for Swiss investors, in spite of substantial price increases. While gold did substantially gain in value in early December, the gold price is denominated by the US dollar, which lost a lot of value against the francs over the past year.
The precious metals silver, platinum, and palladium, lost value in 2023. A lot of value. Had I invested 10,000 francs in palladium, I would have lost 43.61 percent of my capital over the course of the year, which would have left me with just 6203 francs.
More on this topic:
Compare Swiss savings accounts now
Compare Swiss stock brokers now
How to invest money in Switzerland
Blog: Stocks or savings account?
