Legacy Secured, Yet Profitably Invested

Those who inherit want to know that their new assets are safe. However, it is advisable to invest the inheritance to achieve a return. Read in our article how to find the right investment strategy and invest the inheritance to meet your needs.

Two-thirds of the Swiss population inherit significant assets in their lifetime. In Switzerland, inheritance is taken very seriously, with the total volume of legacies and gifts growing steadily, according to studies.

At the same time, most people feel obliged to behave responsibly when they inherit. The legacy should not be squandered but rather sensibly invested, for example for the dream of owning your own home or as a pension for your old age. Security thus has the highest priority for legacies.

Why it is worthwhile to invest the legacy

Nonetheless, it is well worth looking beyond the classic savings account – even if it is considered the safest investment option. The legacy will earn hardly any profit in a savings account, because interest rates are so low. Your capital lies fallow, although it could be earning a steady return.

If you are looking for sensible alternatives, you can find financial investments with better returns. When selecting equities, investment funds, government bonds etc., you can pick an investment strategy to meet your personal needs that we work out in a joint discussion.

Investing in accordance with your personal investment strategy

When you decide to invest your legacy, the first step is to get a clear understanding of your individual needs: What do you seek to achieve with the inherited money? Are you looking to achieve a good return or is security your top priority? Can you invest the entire amount or do you need funds for other purposes in the meantime?
We also need to understand every aspect of your financial situation, i.e. which other savings are to be taken into account, what your income situation looks like, as well as your pension planning for your retirement.

Using this information and your personal risk tolerance, we generate your risk profile and your personal investment strategy.

The term affects the composition of the portfolio

The investment strategy determines the composition of the investments, for example what the percentage of risky assets such as equities the portfolio should contain. The type of securities that you hold in your portfolio also depends greatly on the period for which you want to invest the legacy. If you are planning to buy a home with the inheritance in a few years' time, you can invest the money for a shorter period than if you are saving the capital for your retirement and want to leave the legacy to work on the financial markets for as long as possible.

The rule of thumb here is: The more distant your investment horizon is, the riskier the investments you can make. For example, equities are subject to bigger price fluctuations than bonds. But the latter can also move both up and down. With a long-term investment strategy, you can ignore price drops and wait longer for the financial markets to recover than if you are planning to buy a house and you need your capital at the very moment when your portfolio is showing losses.

Diversification makes for a safe investment

To ensure that the portfolio also offers the greatest possible security, the financial investments contained in it must be widely diversified. This means that there should be not only one financial investment in the portfolio but several, preferably different ones. If one investment loses value, the losses can be compensated for by the other investments. If one investment crashes, you will thus not immediately lose your entire capital.

The more widely the investments are diversified, i.e. the more the investments within a portfolio differ from one another, the less you are at risk of a possible total wipe-out as a result of price drops. After all, you don’t want to speculate your inheritance away.

Investment solution to suit your needs

Your client advisor can help you in terms of portfolio diversification. With Credit Suisse, you can decide for yourself to what extent you want to make use of our support when buying and selling. The investment solutions on offer range from authoritative advice, but with you managing your portfolio yourself, through to the complete solution, in which trading is carried out according to your investment strategy without you having to worry about investment issues. With a firm focus on your individual needs.