Ajooda’s financial advisors get the question “How can I invest in Stocks in Switzerland?” or “How can I invest in cryptocurrencies in Switzerland?” all the time.
How can I invest in Stocks in Switzerland – How did it used to be?
In the past, it was very tedious and expensive to buy Stocks. You had to call your broker or the bank where you had an account to buy or sell the Stocks you wanted.
This was not only very slow and tedious, but also expensive. It was not uncommon to have to pay several hundred francs per trade, depending of course on how many Stocks you wanted to buy at once.
If the price of a share dropped rapidly, investors were in a quandary. On the one hand, you could sell the share at a loss and accept a high transaction fee.
On the other hand, they could hope that the price would recover at some point, which is often not easy to get through and leads to enormous stress, especially when the price seems to be falling into the abyss.
How can I invest in Stocks in Switzerland – Is it easier today?
It is worlds easier. While you can still buy Stocks through your bank these days, it’s not worth it because of the transaction fees mentioned above. Nowadays you can easily buy Stocks through an online broker platform.
While there are so many online brokers to choose from these days that you can almost get confused, ultimately there are only a few that come to mind.
If you’re wondering “Where can I buy into stocks?”, check out the blog for the 4 most popular online brokers in Switzerland.
An online broker is a platform in the form of a website or app that is connected to a bank. In order to buy Stocks, you have to register with the online broker, verify your ID and connect your private bank account to it.
If you want to buy Microsoft Stock, domestic Novartis Stock or invest in ETFs, for example, you transfer money from your private account to your “share account”. The capital now remains in your share account and you can buy and sell shares.
With online brokers, the transaction fee is much lower. With some online brokers, the transaction fee is even less than 1 franc per trade, depending on the volume.
You are not forced to invest the entire amount of money in shares.
If the stock market is currently in a bad situation or if you think it is not yet a good time to buy Stocks, you can simply “park” the money there. You neither gain nor lose anything during this phase, as you have not actively invested the money.
Do I have to pay profit taxes if I profit from share gains?
Yes and no. Whether you have to pay tax on share profits or not depends on whether you are classified as a professional investor by the tax authorities or not.
In Switzerland, you have the huge advantage of paying zero capital gains tax as long as you are considered a private investor.
What is always due, however, regardless of whether you are a private or professional investor, is withholding tax on dividends, for example. This is automatically deducted.
The withholding tax is a safeguard tax and amounts to 35%. You will get this back if you declare your profits correctly in your tax return.
Nowadays the barrier to entry is very low and the market is accessible to almost everyone.
Nevertheless, it is important to acquire at least the basic knowledge of investing and not to blindly follow the news or the trend.
Wealth accumulation does not happen overnight. Those who invest in the stock market on the off chance are probably better off in the casino.