Should you invest in Swiss francs in 2024?
The Swiss franc is one of the most stable currencies in the world; it is the one most often chosen by national banks to store their gold and foreign exchange reserves.
This makes the franc a good asset for preserving capital in times of uncertainty and geopolitical instability.
Over the past few years, the Swiss franc has appreciated significantly against major world currencies, which has increased its attractiveness for investors.
But everything changes, in times of economic instability, will the Swiss currency be able to maintain its position throughout 2024?
In 2024, there are a number of factors that could affect the Swiss franc. On the one hand, the Swiss economy, like the economies of many other countries, is under pressure due to inflation and geopolitical events.
Arguments for"
Stability. The Swiss franc is one of the most stable currencies in the world. It is not subject to sharp exchange rate fluctuations, like some other currencies. This makes it a good asset for preserving capital during times of economic uncertainty.
Safety. Switzerland is a neutral country that does not participate in military conflicts; the Swiss banking system is considered the most reliable in the world.
Low inflation. Inflation in Switzerland is at a low level, despite the global crisis. This fact means that the purchasing power of the Swiss franc remains relatively stable.
High interest rates. Now, interest rates from the Swiss Central Bank (SNB) are the highest in 15 years. This approach makes the currency more scarce and more expensive, creating the preconditions for its growth.
US dollar problems. The instability of the American currency forces investors to look for alternative, more stable assets for storing capital. Such assets are traditionally considered to be gold and the Swiss franc.
Arguments against"
Inflation. Inflation is rising around the world, including in Switzerland itself, and this could lead to a weakening of the Swiss franc.
The weakness of the Swiss economy. The Swiss economy, like the economy of many other countries, is under pressure due to the high exchange rate of the national currency and geopolitical events.
Quite a high rate. Now the Swiss currency has reached its historical maximum against the US dollar and the euro, the situation makes Swiss goods expensive on the European market. It remains a big question whether the franc will be able to rise in price further or the country's government will begin to fight its excessive strengthening.
Overall, investing in Swiss francs in 2024 could be a good idea, especially if used as an alternative to the US dollar. So you will sleep peacefully by investing your savings in the most reliable currency in the world.
The best option would be to create a foreign exchange portfolio in which the franc will occupy a significant share.
Today there are several options for investing in the Swiss franc:
- Invest in Swiss francs directly by buying them on the foreign exchange market. To do this, you need to open an account with a broker .
- Indirectly, by buying shares of Swiss companies or Eurobonds pegged to the Swiss franc.
- Through exchange-traded funds ETFs , which invest in Swiss francs, are traded on various exchanges around the world.
- In online banking, your bank, if it is possible to store money in Swiss francs in your bank account.
Choosing a specific investment strategy depends on your goals and investment profile. At the same time, it is highly not recommended to buy cash currency, since the Bank of Switzerland changes franc notes with enviable regularity. As a result, you can lose money when exchanging old banknotes for new ones.