In this article, here is an example of how to invest 1200 CHF per month with a diversified version?
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Before reading this article
As you can imagine, for this topic I have to write the following message.
⚠️ This article is not investment advice. It is just a personal opinion. Any investment can result in loss of money. ❗
First of all, in order to understand this article. You have to understand the importance of investing. If you didn't understand, you can read my articles in the page investments.
If you understood. Without further ado, let's get to the heart of the matter 🧐
Simplified or diversified version?
⚠ I remind you that this article concerns investors who are looking for a very diversified version. I wrote a ”simplified version” for those looking for a less diversified strategy 😉
How to invest 1200 CHF per month? Diversified version
| Amount | Investment type | Expected annual (gross) profitability based on past performance (before 2023) | How |
|---|---|---|---|
| 500 CHF | 3a Global 100 | 7-11% + tax deductions | For example, with Viac or Finpension |
| 300 CHF | ETF SP500 or ETF Global | 7-12% | Broker for example, Neon Invest, Yuh or Interactive broker |
| 50 CHF | ETF country of residence (example SPI in Switzerland) | 4-7% | Broker for example Neon Invest or Yuh |
| 25 CHF | Cryptocurrency (mainly Bitcoin or Ethereum) | + than 12% | Broker for example, Yuh or Interactive Broker |
| 25 CHF | Gold ETF or Commodity ETF | 0-5% | Broker for example, Yuh, Neon Invest or Interactive Broker |
| 100 CHF | SCPI or ETF REIT or ETF Large dividends | 4-8% | SCPI – Louve Invest ETF REIT or ETF Large Dividends – Broker for example Interactive Broker |
| 200 CHF | Purchase of future accommodation |
To summarize, here are the main categories 😊
| 850 CHF | 70% of the budget | Growth stocks |
| 25 CHF | 2% of the budget | Cryptocurrency |
| 25 CHF | 2% of the budget | Gold or Raw Materials |
| 100 CHF | 9% of the budget | Passive Real Estate or High Dividend Stocks |
| 200 CHF | 17% of the budget | Physical real estate through the purchase of your future home |
⚠ Each investment is detailed on my page investment. Be careful to take into account the advantages and risks of each investment written!
Now that you know how I will invest 1,200 CHF per month 😉. The question is why I will invest this way? 🧐
How to invest 1200 CHF – Diversified version
500 CHF – Global 100 Viac or Finpension
The stock market via ETFs and index funds is in my opinion. The best investment if we take into account the profitability and the necessary investment time 💪
In Switzerland, we have the possibility to invest our 3a capital in the stock market. With a foundation or a bank that manages our money. The latter invests our money in the stock market according to our strategy.
In broad terms, with a monthly standing order. It is possible to:
- Take advantage of the increase in our savings through the results of stock market investments
- Take advantage of tax breaks when paying taxes.
- Invest in the world's leading companies, especially in Switzerland and the USA.
Note that if we base ourselves on Viac's past Global 100 results1 or Findpension2. Based on past performance through 2023. This is 7 to 11% gross annualized on average according to the periods 😏.
🔺However, past performance is not a guarantee for the future❗
👉 Therefore, I think investing in a 3a global 100. It is actually an excellent investment 😉
| Investment opportunity | Gross annualized profitability | Commissions |
|---|---|---|
| Viac 3a Global 100 | 7.7% (2014-2023) | Less than 0.41% |
| Finpension 3a Global 100 | 7% (2019-2023) | Less than 0.41% |
300 CHF – ETF S&P 500 or ETF Global
- ETF SP500
Investing in an S&P500 ETF means investing in the best US stocks.
From a profitability point of view, based on past performance up to 2023. That's 12% annualized between 2014 to 2023 (excluding deductions).
Therefore, by losing 5 minutes per month. It is possible to invest in the 500 best US stocks! Without being a stock market expert 👍
- ETF Global
If you prefer an ETF that invests in the main stock exchanges in the world. In this case, it is possible to take a Global total market ETF 🌎
However, the profitability of a global ETF is likely to be less significant than an S&P 500 ETF.
For example, between 2014 to 2023. That's 8% annualized. Which is respectable.
| Investment opportunity | ETF Example | Gross annualized profitability | TER |
|---|---|---|---|
| ETF Global | Total World Vanguard (VT) | 8% (2014-2023) | Less than 0.10% |
| ETF SP500 | Vanguard SP500 (VOO) | 12% (2014-2023) | Less than 0.05% |
50 CHF – ETF country of residence (SPI in Switzerland)
Although I think it is positive to invest in the US or global stock market. It is also important to invest in your country's stock market 👶
For example, in Switzerland, it is possible to own an SPI ETF to have CHF in the stock market portfolio.
Let us note the advantages of investing in your country are:
- Contribute to the local economy
- Stabilize the fluctuations in your stock market portfolio due to the exchange rate
Therefore, investing 50 CHF in a budget of 1,200 CHF seems sensible and diversified to me. In addition, you receive dividends as a bonus.
On the other hand, investing more than 50 CHF per month seems dangerous to me if you are already investing in a 3a global 100. Because you must not forget that approximately 40% of your 3a global 100 is invested in Switzerland.
| Investment opportunity | ETF Example | Gross annualized profitability | TER |
|---|---|---|---|
| AND F SPI (Switzerland) | SPI iShares (CHSPI) | 6% (2014 -2023) | 0.11% |
| AND F CAC 40 (France) | Amundi CAC 40 | 8% (2014 -2023) | 0.25% |
25 CHF – Cryptocurrency with Bitcoin or Ethereum
Bitcoin and Ethereum are cryptocurrencies that have, in the past, achieved remarkable performance! Outperforming the S&P500 at certain times.
In addition, cryptocurrency allows you to diversify your investments!
Therefore, I think that investing 25 CHF out of 1200 CHF is justifiable.
On the other hand, given the instability of the value of crypto, I prefer not to invest large amounts.
| Investment opportunity | ETF Example | Gross annualized profitability | TER |
|---|---|---|---|
| AND F Bitcoin | iShares Trust Bitcoin ETF | Not enough past data | 0.25% |
| Bitcoin | Bitcoin | More than 12% (2018 – 2023) | |
| Ethereum | Ethereum | More than 12% (2018 – 2023) |
25 CHF – Gold ETF or Commodity ETF
Another way to diversify is to own a Gold ETF or a Commodity ETF.
Overall, commodities and gold offer security against the loss of cash value. In addition, gold and commodities have lower volatility than an SP500 for example.
On the other hand, if you invest in a total market ETF. Such as an SP500 ETF or a global ETF. Note that you already invest part of your portfolio in gold and commodities.
| Investment opportunity | ETF / ETC Example | Gross annualized profitability | TER |
|---|---|---|---|
| Gold ETF | iShares Gold Trust | 5% (2014 -2023) | 0.25% |
| AND F Raw materials | iShares Diversified Commodity | 1% (2019 -2023) | 0.46% |
100 CHF – SCPI, REIT or ETF High Dividend
Another way to diversify investments is to invest in investments that regularly distribute good income or good dividends!
Other investments written previously.
On 1200 CHF, in order to diversify even more. Why not invest 100 CHF per month on 1 of the following 3 investments:
- SCPI
- ETF REIT
- Large Dividend ETFs
Here is a summary of the 3 🧐
- ▶️ SCPI
SCPI, also known as stone/paper, are a way to obtain passive income via regional real estate.
In broad terms. Investing in a SCPI has an affordable starting price, it is a passive investment and there are few administrative worries compared to direct real estate.
In addition, a SCPI can be very diversified regarding the regional real estate market. See international👍
👉 Note that we can easily reach 5 to 8% gross in annuities depending on the SCPI chosen.
On the other hand, in my opinion, the big problem is the commissions and the taxation. For example:
- Taxation between 28 to 35% depending on the country of SCPI. Which is a substantial tax
- If you have a SCPI abroad. You will need to understand the taxation of the country of the SCPI.
- Consequential loss of time if you have to declare a SCPI abroad. Because you have to declare taxes in both countries.
- When you sell your SCPI. You will have exit fees of around 10%, which are in reality, exit fees
To conclude, on average, I think you should subtract about 3-3.5% from the 5-8% of gross profits.
👉 Therefore, I estimate that an SCPI has a net profit of 3-5% depending on the SCPI and the taxation of the SCPI.
If you want an alternative to SCPIs as passive real estate, there are REIT shares 😉
- ▶️ ETF REIT
Broadly speaking, a REIT share allows you to invest in real estate as a shareholder.
Then you will receive your income via the stock dividends.
If you are looking to diversify with REIT stocks, you can invest in an ETF that includes a lot of REIT stocks.
I am thinking for example of the Ishares Global REIT ETF. Which invests in the best global real estate stocks. With gross dividends around 3.5-4%.
Then you have to subtract the percentage for taxes. The taxes will depend on the country of the ETF as well as the dividend received.
👉 Ultimately, net profits will be around 2.5%-3% depending on the ETF and ETF country.
Note that the big advantage of investing in a REIT ETF compared to a SCPI, especially a SCPI abroad. It is a faster and more simplified taxation.
- ▶️ High Dividend Global ETF
If you don't like investing in passive real estate. A good alternative is to invest in a high dividend ETF.
Broadly speaking, a large dividend ETF is an ETF that focuses only on stocks that pay a large dividend.
Note that the big advantage of a High Dividend ETF compared to a REIT ETF is that the High Dividend ETF invests in all sectors and in several countries.
⚠️ Therefore, you will be more diversified with a High Dividend ETF compared to a SCPI or a REIT ETF 🔺
The advantage of a High Dividend ETF is that you don't have to do any work regarding management!
Note that High Dividend ETFs distribute an average of 3-4% gross in dividends.
👉 Removing taxes and TER. The net result will be around 2.5-3.5% depending on the ETF and the ETF country.
Here is an estimate of profitability based on the last years (2014-2023)
| Investment opportunity | Annualized profitability gross value (estimate) | Dividends / Average annual income (gross) | Dividends / Net Income (estimate) | Waste of time with taxes | Sector |
|---|---|---|---|---|---|
| SCPI | Variable according to SCPI | 5-8% (Full Ownership) according to SCPI chosen | 3-5% | Consequential (Mainly with a SCPI abroad) | Regional real estate or international real estate |
| ETF REIT Overall | 1% (2019 – 2023) | 3-3.5% | 2.5-3% | Fast | Global Real Estate |
| Large global or US dividend ETFs | 3-5% (2019 – 2023) | 3.5-4.5% | 2.5-3.5% | Fast | Multi-sector global or US level |
200 CHF – Purchase of future accommodation
I think one day, sooner or later. We will like to own a home to live in 🏠
From a profitability point of view, buying or renting depends on several criteria. But from a physical and emotional point of view. Owning your home is reassuring.
Therefore, I think it is important to save every month to take this step when the time comes.
And even if later we don't use this money to buy a home. It will become additional money for another investment😉
Conclusion
Here is an example of how to invest 1200 CHF per month, with a diversified version 🧐
| Amount | Investment type | % annualized expected net (based on past data). Over a long period (excluding inflation) |
|---|---|---|
| 500 CHF | 3a Global 100 | 7-11% |
| 300 CHF | ETF SP500 or ETF Global | SP500 = 7-11% ETF Global = 5-8% |
| 50 CHF | ETF SPI or ETF of your country of residence | 3-6% |
| 25 CHF | Cryptocurrency on Bitcoin or Ethereum (or both) | 6-12% |
| 25 CHF | Gold ETF or Commodity ETF | 0-4% |
| 100 CHF | SCPI, ETF REIT or ETF High Dividend Global | 2.5-8% |
| 200 CHF | Purchase of future accommodation |
Please note that I cannot guarantee that my investments will be profitable. This is just an opinion based on my research and experience.
Also, remember that this article is an example. I am not forcing you to invest this way.
On the other hand, I think this example of investments has a good diversification between stock market, cryptocurrency and real estate 📊
Also note that the majority of written investments are passive. That's to say, with little work to do and geographically free 😍
And you? How do you think you will invest your investments?
How to invest 1200 CHF – Diversified version
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How to invest 1200 CHF – Diversified version
How to invest 1200 CHF – Diversified version
How to invest 1200 CHF – Diversified version
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