Let your savings bloom
A lot of people have put money aside for a rainy day and would like to make more out of it. But how?
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October 23, 2012, Stephan Lehmann-Maldonado (text) and Raffinerie (photo)
A fresh perspective. If you want to make more out of your savings, you first need to take stock of your wealth. This doesn't have a static value, but is constantly changing. It grows when your income exceeds your cost of living. And here's the question: How much in the way of liquid assets (cash, accounts) do you really need? To make sure you don't leave anything out, we recommend you make an analysis with an expert from UBS. If you've parked more cash than makes sense, take a look at point 2 below.
Cash isn't always king. Savings accounts are seen as safe and practical. But the returns are modest. Also, money can lose real value when inflation rates exceed interest rates. If you can do without a certain amount of money in the medium to long term, entering the financial markets is worth considering. A "fixed income" UBS Strategy Fund yielded an average annual return of nearly 2.4 percent from 1995 to mid-2012 - despite the crisis. Swiss stocks posted an average annual return of over seven percent during the last 85 years. In contrast, you would have received one percent with a savings account - which would have been devoured by inflation. But what is the best investment for your needs?
Spread your bets. Many investors think they can make a lot of money quickly using "secret information." They are wrong. Just as most lottery players overestimate their chances of winning the jackpot, these investors put too much faith in their flair for choosing the right securities. You should stick to the golden rule: diversify - spread the risk across different investments. You don't need to do all the hard work of selecting the securities yourself. There are investment funds for this, whose professionals invest your money in promising, broadly diversified investments. And there are other funds you can invest in, depending on your appetite for taking risks. But when is a good time to invest? Today or tomorrow?
Take a step-by-step approach. No matter how long you wait, hardly anyone manages to get the timing just right. That's why it's a good idea to take a step-by-step approach, and invest a set amount on a regular basis, such as 500 francs a month over a period of two years. Why? If the stock markets are up you can buy fewer securities. When prices fall you automatically acquire a larger quantity of the same securities. This gives you an opportunity to achieve a lower average acquisition price ("cost averaging"). The good news: UBS is currently offering a solution that combines the options described here, and also offers additional benefits.
Benefit from a UBS investment plan. If you've decided to invest your "surplus" funds, the time to benefit from attractive conditions would seem to be now. From October 1 to December 31, 2012, you can take advantage of a special offer. The first step is to deposit the amount to be invested, a minimum of 10,000 francs or euros, into a special UBS savings account investment plan. Then, for a period of 24 months you will automatically invest a fixed amount in the UBS investment fund you have selected. You will receive two percent interest on the part of your deposit not yet invested. It's an ideal basis for building up your wealth.
For more information on the UBS Investment Plan call your client advisor at 0848 848 052 or go online:
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