Which investment is the most profitable?

There are many opportunities to invest. The main question is… Which investment is the most profitable?

Introduction: Which investment is the most profitable?

Many people are looking for THE perfect investment. The one that yields the highest returns.

But the reality is a little more complex.

A very profitable investment is often a very risky investment.

Conversely, a very secure investment generally yields little return.

SO…

👉 Which investment is actually the most profitable?

To answer this question, I compared the main investments according to:

• their historical performance
• their risk level
• the time needed to manage them
• their ability to generate passive income.

⚠️ Past performance is not indicative of future results. Investing involves the risk of losing money. I am not responsible for your financial investments.

What is passive income?

A passive income is an income that is generated with little work. In truth, once the initial investment is made, passive income requires very little management from the investor.

Unlike a active income, where you directly exchange your time for money (like a salary for example), a passive income can continue to generate income even when you are not working.

For example, by investing in a high-dividend ETF, you will receive semi-annual dividends, while the ETF does the management for you for a commission.

Can all investments really be compared?

Not entirely.

For example, comparing buying an apartment with buying Bitcoin is a bit like comparing a motorcycle with an airplane.

The 4 criteria to analyze before investing?

Before looking at the performance of an investment, you need to understand four criteria.

The yield

Return corresponds to the potential gain that your investment can generate over time.

For example, if you invest 10,000 CHF and your investment yields an average of 8 % per year, your capital will tend to increase gradually thanks to compound interest.

Historical performance can give you an idea of an investment's potential. However, it's important to remember that good past performance is never a guarantee of good future performance.

The risk

Each investment carries a different level of risk.

Risk represents the possibility that your investment will lose value, sometimes significantly.

For example, a savings account is very low risk, but historically has been very unprofitable, while stocks or cryptocurrencies can experience sharp declines in certain periods, or sharp rises in other periods.

As a general rule, the higher the potential return, the greater the risk and the more the investment fluctuates in value.

Furthermore, each investment carries different risks. For example, buying an apartment carries a different risk than buying gold.

Investment time

Not all investments require the same level of involvement.

Some investments, such as a diversified ETF, can be managed in a few minutes per month.

Conversely, a rental property investment or the selection of individual shares, for example, often requires much more time: research, management, monitoring, taxation, work, etc.

The best investment is also the one you can manage calmly. Because we don't want to create a second job for ourselves with our investment.

Diversification

Diversification involves spreading your money across multiple companies, business sectors, countries, or asset classes.

Its goal is simple: to prevent a single bad investment from severely penalizing your entire portfolio.

For example, buying a single stock is much less diversified than investing in a global ETF that groups together several thousand companies spread across different countries around the world.

👉 Good diversification generally reduces risk without necessarily diminishing the potential return.

The rest of this article

In the rest of this article, we will compare the main types of investments according to these four criteria:

1. their historical performance
2. their risk level
3. the time they ask for
4. their diversification capacity

Comparison of the main investments

Investment	Historical yield* (From 1 to 6)	Risk	Time	Diversification
ETF World	⭐⭐⭐⭐	AVERAGE	Very weak	Very high
S&P 500 ETF	⭐⭐⭐⭐⭐	AVERAGE	Very weak	Pupil
Individual actions	⭐⭐⭐⭐⭐	Pupil	Pupil	Weak
Bitcoin	⭐⭐⭐⭐⭐⭐	Very high	Pupil	Weak
Rental real estate	⭐⭐⭐	AVERAGE	Pupil	Weak
SCPI	⭐⭐⭐	AVERAGE	Very weak	AVERAGE
Gold ETF	⭐⭐	Weak	Very weak	Weak
Savings account	⭐	Very weak	None	Weak

*Historical performance figures, not guaranteed.

ETFs: the best compromise between return, diversification and simplicity

If I had to recommend just one investment to someone starting out, it would probably be a diversified ETF. For example, an S&P 500 ETF or a Global ETF.

For what ?

Because ETFs allow you to invest simultaneously in hundreds, or even thousands, of companies with a single purchase.

For example :

• a FTSE All-World ETF holds more than 3,500 companies worldwide; ;
• An S&P 500 ETF groups together the 500 largest American companies.

Why are ETFs recommended?

Several reasons consistently recur in academic studies.

1. Diversification

Instead of choosing a single stock, you invest in hundreds of companies.

For example, you're not just investing in Apple or Microsoft. But you're investing in an entire national or international economy, depending on the ETF.

Diversification is key to reducing the risk of losing money.

2. Extremely low costs

Index ETFs often cost between 0.03% and 0.29% per year, compared to sometimes more than 1,5% for certain actively managed funds.

Over several decades, this difference in costs represents tens of thousands of francs saved.

Vanguard believes that cost reduction is one of the factors explaining the outperformance of passive investors over the long term.

3. Compound interest

Capitalisation ETFs automatically reinvest dividends.

The gains then generate new gains, which in turn generate new gains.

This is exactly the principle of compound interest described by Albert Einstein as “the eighth wonder of the world”"(quote without historical evidence, but which perfectly illustrates the financial phenomenon).

4. Very little management

Unlike individual stocks, an ETF requires virtually no monitoring.

You can simply invest each month.

Time then does much of the work to increase yield.

What do the studies show?

The results are particularly interesting.

THE SPIVA Scorecard S&P Dow Jones has been comparing active funds with their benchmark index for over twenty years.

The conclusions are very clear:

• Over 15 years, Nearly 90% of actively managed US funds underperform the S&P 500

In other words: if you invested 15 years ago in an S&P500 ETF, you have a 90% chance of having obtained a better return than the 10% of active traders, often seen as “finance professionals”.

This explains why Vanguard, Morningstar and many researchers now recommend index ETFs as a primary investment for individuals.

In reality, an S&P500 ETF is:

• easy to invest
• more profitable than most finance professionals

Individual shares: potentially very profitable… but much more difficult

Buying an individual share means betting on a single company.

For example :

• Apple
• Microsoft
• Nvidia
• LVMH

If your choice is excellent, the gains can be spectacular.

Nvidia, for example, has experienced exceptional growth in recent years.

But we must not forget, the reverse is also true.

Kodak, Nokia or General Electric were once considered indispensable companies and… their stock has fallen drastically.

Why is investing in a stock riskier?

When you buy a single share, your wealth is heavily dependent on that company.

• A bad decision by management.

• A failed innovation.

• A crisis.

And your investment could lose a lot of value.

With an ETF, this risk is more limited because an ETF pools several stocks. Indeed, the number of stocks tends to stabilize stock market growth.

Are the studies favorable?

Not really.

A famous study by Hendrik Bessembinder (Arizona State University) shows that:

• only Approximately 4% of US stocks account for all of the market's wealth creation since 1926

• The majority of stocks ultimately underperform US Treasury bonds.

In other words: Finding the few winning stocks is extremely difficult.

ETFs allow you to own them automatically.

John Vanguard, a very famous financier, said:

Don't look for a needle in a haystack. Buy the haystack.

Real estate: a profitable investment… but highly dependent on the context

According to an article from the European bank, here is how each European invests 100 euros on average.

We see that real estate remains one of the preferred investments of Europeans.

However, it should be noted that there are several ways to invest in real estate:

Rental real estate

This is the most well-known principle.

• Buying a home.

• Rent it.

• To receive the rents.

On the other hand, there is an active part that is sometimes difficult to manage:

• the tenants
• the administrative
• neighbor meetings
• the works

And that's without even mentioning the expenses which sometimes significantly reduce the return.

• taxes
• insurance
• the works
• the lack of tenants

Management time is therefore important. And the costs can quickly reduce profitability.

SCPIs

Real estate investment trusts (REITs) allow you to invest in real estate without directly buying an apartment.

In truth, it's a way to invest in passive real estate.

• You buy shares in a real estate portfolio that is managed by a real estate company.

• You then receive a portion of the rent proportional to your investment.

This makes investing much simpler to manage and requires very little time.

In return:

• entrance fees are often high
• liquidity is lower than an ETF

In my opinion, it is better to invest in a diversified European SCPI, in order to combine profitability and diversification.

REITs

REITs (Real Estate Investment Trusts) are real estate companies listed on the stock exchange.

It is also a way to invest in passive real estate.

They allow you to invest in:

• offices
• housing
• hospitals
• shopping centers
• logistics warehouses

For greater diversification and to reduce the risk of losing money, it is possible to invest in a global REIT ETF.

REIT ETFs thus combine:

• Highly diversified real estate investments (worldwide)
• ease of management via an ETF

Which real estate investment should I choose?

In reality, there is no single “real estate investment”.

Between a rented apartment, a SCPI (real estate investment trust) or a REIT ETF, the investment depends primarily on what the investor is looking for:

Criteria	🏠 Rental property	🏢 Diversified European SCPI	📈 Global REIT ETF
Expected gross yield over the long term (growth + rents)	⭐⭐⭐ 3-9%	⭐⭐⭐ 3-8%	⭐⭐⭐⭐ 4-9%
Risk	Medium to high	AVERAGE	AVERAGE
Management time	Pupil	Very weak	Very weak
Ease of investment	Complicated	Average	Very simple
Minimum amount to invest	Very high	Weak	Very weak
Diversification	Weak	High	Very high
Liquidity	Weak	Low to medium	Very high
Regular income	✅ Rents	✅ Distributed income	✅ Dividends (depending on the ETF)
Volatility	Weak	Weak	Average (listed on the stock exchange)
Management time per month	Very high	Weak	Weak

The best choice therefore depends primarily on your objective:

• Do you have time to dedicate to your investment, a high initial budget, and do you want to carry out renovations? → Rental property.

• You have a low initial budget, you want a passive real estate investment and to earn 3 to 9% per gross year? → Diversified European SCPI or Global REIT ETF.

Which investment should I choose? A Global ETF or a Global REIT ETF?

This topic deserves a more in-depth article.

For this article, here is a summary in table format:

	Global ETF or Global REIT ETF
past profitability	ETF Global
Less risk of losing money	ETF Global (more diverse)
More diversification	ETF Global
Fewer TER commissions	ETF Global

A global multi-sector ETF is therefore a better choice, but combining the two is a smart option.

Cryptocurrencies: exceptional performance… with extreme volatility

Bitcoin is probably one of the best-performing assets since its creation. But also one of the most volatile.

It has already experienced several declines exceeding 70 %.

For example :

• 2013
• 2018
• 2022

Despite this, its historical performance remains spectacular.

It is precisely this combination:

• high potential
• very high risk

which divides investors so much.

For this reason, most financial experts advise investing only a small portion of one's investment portfolio, generally less than 5% of the portfolio.

Gold: a safeguard rather than an engine of growth

Unlike stocks, gold does not produce:

• no dividend
• no rent
• no interest

Its main objective is different.

Its main purpose is:

• store of value
• protection against certain economic crises
• portfolio diversification

Historically, its return remains lower than that of stocks over the very long term.

On the other hand, it has often held up better during certain periods of high inflation or financial uncertainty.

A savings account: essential… but not for getting rich

The purpose of a savings account is not to grow your wealth. Its true role is much simpler.

👉 Buy peace of mind.

It helps to finance:

• a car breakdown
• a dismissal
• a medical emergency
• a large unexpected bill

As a general rule, savings account interest rates rarely exceed inflation in the long term.

In other words: a savings account is for paying for unexpected expenses, not for becoming rich.

My personal ranking

Here's how I would invest 100 CHF per month:

• 25% – S&P 500 ETF

• 25% – ETF Global (ex. ETF VT)

• 10% – High-growth ETF (e.g., Nasdaq ETF)

• 10% – Global high dividend ETF (e.g., VHYL ETF)

• 10% – ETF for your region (e.g., IMEU ETF if you reside in a European country)

• 10% – Diversified European SCPI or Global REIT ETF

• 5% – Global Bond ETF (example: BNDW ETF)

• 2.5% – Bitcoin

• 2.5% – Gold ETF (or Gold ETC)

According to artificial intelligence, taking into account the period 2015-2025, This investment portfolio has recorded an approximate return of 12% per year (dividends reinvested), by having very good diversification and an acceptable level of risk.

Past performance is not indicative of future results. However, it is a historical analysis worth considering.

However, during this period, Bitcoin delivered excellent returns that are unlikely to be repeated. Therefore, an annualized return of 9-11% is a more conservative estimate for this portfolio.

It is important to remember that...’A portfolio that generates 10% annually doubles the initial amount every 7.2 years.. That is to say, if you have 100,000 euros and you hope to earn 10% per year, you would have 200,000 euros in 7 years.

Here is a table showing the past performance for each investment (dividends reinvested):

Invest	Percentage of portfolio invested	Expected annual return (very long term)
ETF World	25%	8–10 %
S&P 500 ETF	25%	10–12 %
Nasdaq ETF	10%	12–15 %
Global high-dividend ETF	10%	6-9%
ETF from your region	10%	6-9% (If you live in Europe)
Rental property, diversified European SCPI or Global REIT ETF	10%	3–9 %
ETF or ETC Gold	2.5%	4–7 %
Bitcoin	2.5%	-50 to +50% (depending on the period analyzed)
Global Bond ETF	5%	2–5 %
Savings account	0% (3 months of reserve salary)	0–1 %
Total	100%	8-12% per year

Without forgetting, It is important to set aside at least 3 months' salary for financial emergencies., because it is better to use one's savings rather than one's investment in case of financial need.

Summary of this portfolio:

• A portfolio with an annualized return of approximately 12% over 10 years (I forecast 8-11% per year, without guarantee)
• Investment in multiple financial assets (stocks, real estate, crypto, gold, etc.)
• There are many stocks that are invested in worldwide
• High diversification (but mainly in US stocks)

Conclusion

Choose the most profitable investment It's not just a question of performance, but of’balance between return, risk and diversification.

There is no perfect investment: each option has its strengths and weaknesses, and the “best” depends on your objectives, your risk tolerance, and your ability to manage your portfolio.

THE AND F diversified indices (such as the S&P 500 or VT) stand out as the best compromise for most investors. They offer a exceptional diversification, of the reduced fees, a passive management and solid historical returns (8 to 12% per year on average).

Studies confirm it: in the long term, 90% actively managed funds underperform their benchmark index, This makes ETFs a simple and effective choice.

Regarding real estate investment, a European SCPI or a Global REIT ETF is simple to manage, requires little knowledge, requires a low initial capital and offers an attractive return, although generally lower than that of a multi-sector Global ETF or the S&P500 ETF.

THE cryptocurrencies While cryptocurrencies like Bitcoin can offer high returns, they are very volatile. Therefore, I recommend not investing more than 5% from your portfolio.

A global government bond ETF is a good addition to a portfolio. While long-term returns aren't very high, it's a relatively safe investment, with a yield of 3-5% per year and dividends distributed monthly (e.g., the BNDW ETF). However, I believe it shouldn't exceed 5% in the portfolio.

L'’gold plays a role of protection rather than growth. 5% of the portfolio is also the maximum to hold in the portfolio.

My ideal portfolio: a smart balance

Here is a breakdown diversified, efficient and adaptable for an estimated average annual return between 8% and 12% (depending on the period):

• 25% ETF S&P 500 (American growth)
• 25% ETF Global (global diversification)
• 10% High Growth ETF (e.g., Nasdaq)
• 10% High Dividend ETF (e.g., ETF VHYL)
• 10% Regional ETF (e.g., IMEU for Europe)
• 10% European Diversified SCPI or Global REIT ETF (regular dividends via property rentals)
• 5% Global Government Bond ETF (stability + monthly dividends)
• 2.5% Bitcoin (high potential, high risk)
• 2.5% Gold ETF (crisis protection)

💡 Key points to remember :

• A wallet 10% annualized return doubles your capital every 7.2 years (rule of 72).
• Diversified to reduce risks without sacrificing performance.
• Reinvest your dividends to take advantage of compound interest, the “eighth wonder of the world” according to Einstein.
• Keep 3 to 6 months' salary in emergency savings before investing.

If you're looking simplicity, performance and serenity, THE Global ETFs are the ideal base. Add a touch of real estate, crypto, and gold to diversify and protect your assets. And above all, Start early, invest regularly, and remain patient. Time is your best ally.

FAQ Which investment is the most profitable?

Investment in general

What is the most profitable investment in the long term?

THE stocks (via global ETFs such as the S&P 500 or VT) historically offered the better yields in the long term (8 to 121 TP3T per year on average). However, they carry a risk of short-term volatility. cryptocurrencies (like Bitcoin) have outperformed over certain periods, but their risk is much higher.

Can you get rich with passive investments?

Yes, but that requires time and discipline. By regularly reinvesting in diversified ETFs and taking advantage of compound interest, Capital can grow significantly over 10, 20, or 30 years. For example, a return of 10% per year doubles your capital every 7.2 years.

How much do you need to invest to live off your passive income?

It depends on your lifestyle and your average yield. For example:

• To live with 2,000 CHF/month (24,000 CHF/year), you would need a portfolio of approximately 600,000 CHF with an average yield of 4% (24,000 ÷ 0.04).
• With a yield of 8%, You would only need to 300,000 CHF.

Should you invest in Switzerland or abroad?

Both! Global ETFs (e.g., VT) give you access to best companies in the world (Apple, Microsoft, etc.), while a Regional ETF (e.g., IMEU for Europe) can reduce currency risk. In Switzerland, a Swiss ETF (e.g., SPI) can also supplement your portfolio.

On ETFs

Why are ETFs recommended for beginners?

• Automatic diversification A single ETF can contain thousands of stocks.
• Very low fees (0.03% to 0.30% per year versus 1%+ for active funds).
• Passive management No need to follow the markets daily.
• Proven performance : 90% of active funds underperform their index over 15 years stradinghours.com.

Which ETF should I choose to start with?

• For global diversification : Vanguard FTSE All-World (VT) Or iShares MSCI World (IWDA).
• For the United States : iShares S&P 500 (VOO).
• Regarding dividends : Vanguard FTSE All-World High Dividend Yield (VHYL).

Capitalization or distribution ETF?

• Capitalisation ETF if you do not wish to reinvest the dividends yourself.
• A distributing ETF if you wish to reinvest the dividends yourself.

On real estate

Rental property, SCPI or REIT ETF: which to choose?

Criteria	Rental real estate	SCPI	Global REIT ETF
Gross yield	3–9%	3–8%	4–10%
Management time	Pupil	Very weak	Very weak
Minimum amount	Very high	Weak	Very weak
Diversification	Weak	High	Very high
Liquidity	Weak	Low to medium	Very high

👉 Choose :

• Rental real estate if you have time, a high budget and want to control your investment.
• SCPI or REIT ETF if you want one passive income without active management.

Are SCPIs a good investment in Switzerland?

Yes, but:

• Benefits Regular income, passive management, real estate diversification.
• Disadvantages : High entry fees (5–10%), limited liquidity, taxation to be studied (property income tax in Switzerland).
  👉 Prefers a diversified European real estate investment trust (REIT). to reduce the risks.

Furthermore, taxation can vary significantly from one SCPI to another. Choosing an SCPI with optimized taxation can save you thousands of euros per year.

On cryptocurrencies and gold

Should you invest in Bitcoin?

• Yes, but with caution. : Allocate max 2–5% from your wallet (as in the example).
• For what ? High yield potential, but extreme volatility (e.g. -70% in 2022).
• Strategy Invest regularly (DCA) and Only invest what you can afford to lose.

What is the purpose of gold in a portfolio?

• Protection against inflation and economic crises.
• Diversification (Gold has a low correlation with stocks).
• Yield Historically 4–7% per year (less than stocks, but more stable).

On portfolio management

How long does it take to manage your portfolio?

If you have a portfolio of ETFs and SCPIs, 5 minutes a month is enough.

When should you rebalance your portfolio?

• Every 6 months : Check that your allocations (e.g. 25% ETF S&P 500) are still being respected.

Should you invest all at once or gradually?

Invest once a month, without speculating. This is often the best long-term strategy. In addition, it reduces emotional risk (DCA).

Taxation and savings

How are ETFs taxed in Switzerland?

• Dividends The withholding tax on dividends varies depending on the country of origin of the dividend, ranging from 0% to 35%. However, after taxes have been paid, dividends are generally taxed at an effective rate of 12% to 15%.
• Capital gains : Exempt (unless you are considered a “professional trader”).
• Investment funds Tax on the net worth (varies depending on the canton).

How much should you save before investing?

• precautionary savings : 3 to 6 months' salary into a savings account (for emergencies).
• Invest Start as soon as you have a starting capital (even 100 CHF/month in ETFs).

Mistakes to avoid

What are the worst mistakes in investing?

1. Do not diversify (e.g., putting all your eggs in one basket with a single stock or crypto).
2. Wanting to time the market (nobody predicts crashes or rises).
3. Ignore the fees (High fees eat into your returns in the long run).
4. Panic selling (selling during a downturn out of fear).
5. Follow the trends (e.g., buying Bitcoin at the peak due to FOMO).

Is it possible to lose all your money by investing?

Yes, but it's very rare if you diversify your assets. (e.g., global ETFs + global real estate ETFs + gold).

Most often, those who lose all their money investing are those who don't diversify their portfolios enough. For example, investing all their money in a single stock, a single real estate project, or solely in Bitcoin.

Which investment is the most profitable?

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Which investment is the most profitable?