For US president Donald Trump, April 2, 2025 will go down in history as a day of liberation for the United States. It was a historical day, in any case, as the president’s announcement of the sweeping tariffs of at least 10 percent for imported goods resulted in widespread nervousness.
The stock market reacted with substantial losses, and Swiss stock indexes were no exception. In this article, moneyland.ch explains what this situation means from the perspective of investors and savers.
My stocks and ETFs are in the red. What should I do?
As long as you have a long investment horizon, have only invested money that you can afford to live without, and have invested in a diversified stock portfolio (using ETFs, for example), then you can simply keep calm and wait. Selling your assets out of panic is not advisable. Having an emergency fund to cover short-term financial needs is highly recommended.
Broadly-diversified stock and ETF portfolios, such as portfolios that replicate global stock indexes, have historically delivered substantial returns over long investment terms in spite of temporary setbacks. It is probable that the stock market will recover from the current collapse as well, though there is no sure way to predict for certain if that will actually happen, and when. Important: It is important to note that the statements made here only apply to diversified stock investments, such as ETFs that replicate entire stock indexes. If you only invest in a few select, individual stocks, you run the risk of making substantial losses, both over the short-term and long-term.
For short-term investments, it is best to avoid investing in stocks altogether. Interest-bearing investment vehicles like savings accounts and medium-term notes are more suitable.
Should I invest in precious metals or cryptocurrencies?
Precious metals are considered to be a proven asset for protecting your wealth in times of crises. And the prices of gold and silver actually have shot up over recent weeks. Allocating some capital to precious metals as a means of diversifying your portfolio can be a sensible move. You can invest in Gold, Silver, Platinum, and Palladium by either buying actual bullion, or by buying shares in ETFs that invest in these metals.
Be aware though, that the prices of precious metals can be very volatile, and there is no way to predict how they will develop. For that reason, using precious metals for a very large portion of your portfolio is not recommended, as doing so creates a substantial concentration risk.
Cryptocurrencies like bitcoin and Ethereum should also be treated with some skepticism. The unpredictability of cryptocurrency price developments makes them somewhat unsuitable as an asset for protecting your wealth in times of crises. If you choose to invest in bitcoin, Ethereum, and other cryptocurrencies, make sure you understand that although prices do sometimes climb substantially, there is also high potential for major losses. The price of bitcoin, for example, sank significantly after president Trump’s tariff announcements.
What does the crash mean for savers?
For now, at least, the stock market plunge has no impact on savings account balances. The interest rates of Swiss savings accounts are heavily dependent on the key interest rate of the Swiss National Bank (SNB). Since March 21, 2025, the key interest rate has sat at 0.25 percent.
As of yet, most analysts expect interest rates to continue to sink, partly because inflation in Switzerland sits at just 0.3 percent (March 2025). That would be even more likely in the event of an economic downturn.
The interest rates of fixed deposit accounts and medium-term notes are fixed for a predetermined investment term. If you already have money invested in medium-term notes, nothing will change for you. The interest rates for new fixed deposit and medium-term note offers are based largely on expected developments in the SNB’s key interest rate, and normally react to changes more quickly than the interest rates of savings accounts.
Will the tariffs affect mortgage interest rates?
The interest rates of fixed-rate mortgages (FRMs) have sunk somewhat since the tariffs were introduced. The average interest rate has sunk by 0.09 percentage points for two-year FRMs, by 0.11 percentage points for five-year FRMs, and by 0.08 percentage points for 10-year FRMs. The heightened economic risks have made further cuts to the SNB’s key interest rate more likely, which in turn has put downward pressure on mortgage interest rates. Currently though, most economists do not expect a return to negative interest rates in the next three months, or even by the end of the year.
How is the situation affecting the Swiss franc?
The Swiss franc enjoys the reputation of offering wealth protection in times of crisis. After the announcement of broad tariffs by the US, the franc gained strongly against both the US dollar and the euro. For Swiss holidaymakers who travel to foreign countries, a stronger Swiss franc translates into more purchasing power abroad. When the franc gains value against the local currency, products and services in the cheaper cost less in Swiss francs.
The flip side of the coin is that Switzerland will become less attractive to foreign tourists. From the standpoint of people outside of Switzerland, a stronger Swiss franc means that goods and services in Switzerland cost more in their currency. A strong Swiss franc also poses difficulties for exporters because their prices become less attractive for customers in foreign countries.
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