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Health & Fitness

International Investing - Switzerland

The world is a big place – there are over 190 countries and 7 billion people in the world, which really boggles the mind if you sit down and think about it. In addition to being an interesting intellectual exercise, this fact can also have broad implications for your investments and your financial future. It is easy to stay focused on U.S. firms, news, and events during the day-to-day grind, but it is always important to be aware of your surroundings – especially when it comes to your investments. With that in mind, this series of articles will focus on countries and investment opportunities outside the United States that you might not usually hear about.

As always, be sure to consult a financial services professional familiar with both the potential investment and your unique financial situation before embarking on any investment program.

Switzerland

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Scenic mountain landscapes, skiing, and hot chocolate and some of the first things that come to mind when thinking of Switzerland. In addition to these factors, there are several other connotations that come to mind when investors, and most people, think of Switzerland. Fine watches, private banking, and other highly trained professional services are more products and services that are often associated with the country. If, however, that is the extent of your analysis, you will be missing an extremely large part of Switzerland’s economic appeal, and some of the factors that can make it so attractive as a potential investment opportunity.

Several of the advantages of investing in Switzerland, and reasons why it might of interest to investors are easy to see, and do line up with some of the popular knowledge of the nation. Switzerland has a very long history of political neutrality, which has helped lead to the development of an extremely strong economy that is firmly built on a foundation of high quality infrastructure, highly trained services professionals, and an excellent network of universities, technical institutes, and R&D facilities. These factors, combined with low inflation and a strong currency, have made Switzerland a safe-haven economy, especially in the aftermath of the financial crisis of 2007-2008.

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When looking at investing in Switzerland, there are two primary ways to go about it – ADRs or direct purchases. An ADR is basically a certificate held by a U.S. banking institution that represents a certain number of shares in the foreign company, and is held by the U.S. institution. This helps to cut down on the administrative fees and other costs that would otherwise be incurred. For more direct exposure, you can also purchase shares directly from Swiss stock exchanges if your broker offers those services to its retail investor base (you and me).

There are two primary stock markets in Switzerland that are available for international investors to utilize when looking to put funds to work in Swiss stocks. The SIX Swiss Exchange is the largest exchange, home to the 20 largest firms, whereas the Berne eXchange caters primarily to the mid-size firms in the market. Several of the largest and most well-known Swiss firms available for investment via ADR include Nestle, Roche Holding Ltd, Novartis AG, Credit Suisse, and UBS. Two of the more popular Swiss ETFs for investors are iShares MSCI Switzerland Index ETF, and CurrencyShares Swiss Franc Trust ETF.

As always, I have attached some links with more information

Happy Reading!

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