A broad overview of the most important types of investment, without jargon, honest about the pros and cons. No hype, no promises, just a solid foundation for your own decisions.
Investing means converting today's money into an asset, in the expectation that it will gain in value or generate income over time. That could be a stock, a property, a loan to a state, or a basket of hundreds of companies. All forms of investment share one link that can't be argued away: more expected return practically always means more risk and more fluctuation. Anyone who internalises that makes more realistic decisions than someone hoping for an investment that pays a lot and never falls.
Time in the market beats timing: Staying invested for the long term historically pays off more than trying to hit the perfect entry and exit point.
Diversification: Spreading your money across several types of investment and many individual holdings reduces the risk that a single bad decision hits your entire wealth.
Only with money you don't need in the short term: An emergency fund for emergencies always belongs in a savings account first, only what's left after that gets invested.
There are far more than five ways to invest money, these five are the most relevant for most people in Switzerland, in ascending order of typical risk.
A loan to a state or a company that pays a fixed interest rate over a fixed term.
Cons: when interest rates rise, existing bonds lose value, and returns are often only just above inflation.
A basket of hundreds or thousands of companies in a single purchase, see the ETF page.
Cons: no influence over individual companies, and even an ETF can fall significantly in between.
Direct ownership of a flat or house, or indirectly via real estate funds traded on the stock exchange.
Cons: high capital requirement for a direct purchase, low liquidity, and upkeep as well as interest-rate changes can quickly change the maths.
A share in exactly one company, see the stocks page.
Cons: higher volatility for individual stocks, needs research, and if the company does badly, nothing cushions the fall.
Digital money with no company behind it, see the cryptocurrencies page.
Cons: very high price swings, no foundation of revenue or profit, for most people more speculation than investment.
This order isn't "the best first", but a rough risk ladder. Most successful investment strategies combine several of these types rather than betting on a single one, that's the real meaning of diversification.