Swiss-based Asset Management

Who belongs (almost) always to the losers on the capital markets?

• Speculators who put a large part or even all of their assets in one stock alone or in just a few. In effect, staking everything on just one card. Especially when profits are not taken, and losses are just allowed to run on. Most of this time this results in total loss in the short or the long term. In individual cases, this strategy can result in unexpected wealth, if you are lucky. Sadly, experience shows that this is seldom the case and is purely a matter of luck.
• Investors who do not receive professional advice because they are actually talking to salespeople who want to sell them something, rather than directly to independent advisers.
• Investors who believe that they are better than the market and then learn the lesson the hard way.
• Direct sales to retail investors is commission-driven and expensive. The sales costs alone make a lucrative investment almost impossible. This regularly results in a total loss by dubious providers on the grey capital market. The greatest possible caution is needed in the unregulated markets. You are better off keeping your distance from them!
• Investors who use leverage incorrectly and quickly lose all of their capital because the smallest fluctuations have a multiplied effect and positions are then closed out.
• Never blindly trust stock tips from stock market letters or other sources. Such tips should always be viewed and analysed critically before doing anything else.
• Bad products: If you buy a bad product, the opportunities for profit are not as ideal as might be expected. Learn beforehand how to recognise bad products.

What does an asset manager do?

Basically, the task of the asset manager is to make decisions about investments. This can always be done in consultation with the investor, or independently. The asset manager observes market changes on a daily basis and reacts immediately if needed thus securing profits. A good asset manager has the same interests as their client. Only sustainable strategies with consistent profits ensure a long-term business relationship.

An asset manager cannot afford sustained losses as this would result in economic failure as investors would withdraw their capital. The interest of the asset manager is therefore never have a short-term interest in commission, as they themselves are involved in the long-term success of the investments.

One major problem meaning private investors lose money, is the lack of tracking and control of the development of their investments. There are often emotional bases for decision-making which are not in line with the market expectations, meaning over-priced stocks are bought or the time of entry into a position has been badly chosen.

An asset manager has already gone through this learning process and will always free themselves of false expectations and decisions based on emotions, relying solely on their own expertise.

How safe is an external asset manager?

Regulated asset managers are safe. It is not necessary to transfer the assets onto the account of the asset manager. The customer’s account is always with a custodian bank which keeps all the securities and cash balances safe. An asset manager cannot make any balance transfers.

The separation of banking and asset management is a rapidly growing trend which has many advantages for the customer. The most important advantage is the independence of the asset manager.

Digital revolution

• An important reason why the digital revolution is advancing so quickly in emerging markets is simple: the lack of existing infrastructure.
• Since access to traditional, stationary banks, retail stores and other services is limited, people are quickly adopting the use of digital offerings.
• Of the 30 most digitised economies of the world, 16 are in the emerging markets led by China, South Korea, Indonesia and Columbia.
• On average, digital sales in the emerging markets are growing by 11% per year – much faster than in industrialised countries – and business costs are also falling faster.
• This digital productivity surge is likely to help emerging markets make a comeback.

Cryptocurrencies

• When the US launched trillion-dollar economic stimulus programs in 2020, its debt to the rest of the world rose to well over 50% of its gross domestic product – a level which has often triggered financial crises.
• Today, the US dollar is the undisputed reserve currency, but the empires that held that coveted status in the past faltered when the rest of the world lost confidence that they could pay their bills.
• Up until now, US politicians could see no serious rival to the US dollar.
• The big surprise of 2020 was the advent of Bitcoin as both a store of value (a digital alternative to gold) and also as a medium of exchange (a digital alternative to the US dollar).
• There are still sceptics, but “millennials” are almost ten times more likely to own cryptocurrencies than “boomers”, and it is the younger generation who will one day decide which currency will replace the US dollar.