By Julia

While I am at home these days, I got to catch up on some side topics such as taking care of my financial assets, and I have to admit I was prohibitively careless with it, especially during this crisis. Hence, I’ve been reading up on this topic a lot and would like to share my insights on the question of how to build up a long-term investment portfolio and make it crisis proof.
 
Overall these 5 elements tend to come up in a balanced portfolio:
(Disclaimer: this is my personal view and I am not a financial advisor)

• Stocks: Betting on individual stocks is risky but usually entails higher returns than comparable investments. When building up a stock portfolio it’s good to balance cyclical with anticyclical investments: ie. stocks in insurance, energy or waste mgmt. If you want to be on the safer side invest in ETFs that mirror the global stock market (here is how).
   
• Assets: Real estates, e.g. owning an apartment in a lucrative location or investing in real estate fonds are proven to pay off over time.
   
• Bonds: Mixing your portfolio with government bonds of countries that are unlikely to default are a good and secure long-term investment. Traditionally US treasury bonds were performing better than European ones.
   
• Gold: This is seen as a safe heaven. Common advice is not to have more than 10% of your investments in gold. You can either buy physical gold, invest in Gold ETFs or even in gold mines (directly or through fonds).
   
• Cash: Keeping 20-30% in cash is sensible in times of crisis. If you don’t trust the Euro, the Swiss Franc is known as more crisis proof. Also, if all goes down the drain you can use cash to convert into physical assets (real estate, gold, diamonds) before inflation hits. Cash is king.

The question whether now is a good time to invest is hard to answer as no one can predict when and how the corona crisis will end. I have a very stock centric portfolio (80%) but given that I started “early” to invest (5 years ago) and mainly in tech companies it still has a positive return but it took a huge dip (from 100% to 30% return).

As much as I would love to reshuffle my portfolio now, I am currently holding it tight until the dust settles a bit before I will rebalance it (i.e. investing in selected stocks which are undervalued, real estate, Gold ETFs, etc.). History has shown that the markets usually emerge stronger than before after a crisis, but we need to be patient and think long-term.