Building wealth through strategic investments is a strategy that Professor Erwin Heri recommends. His book, “The Eight Commandments of Investment,” outlines the rules to follow in his 2002 book, which remains relevant today. Heri emphasizes the importance of Pillar 3a and highlights Bitcoin’s role in today’s investment landscape.
Heri advises investors not to leave money idle in bank accounts but instead invest it strategically in stocks for long-term wealth accumulation. He warns against market timing and encourages a focus on long-term strategies, utilizing savings plans, index funds or ETFs. Diversification is key to managing risks, especially in the stock market, where individual stock risks can lead to significant losses. While it’s beneficial to invest in Swiss stocks due to stable companies and no currency risk, Heri also cautions investors about investing too heavily in foreign markets due to currency risks and potential tax implications.
Understanding individual financial obligations and goals is crucial when dividing investments among different asset classes. Heri recommends aligning investment structures and durations with specific goals to avoid mixing objectives. He emphasizes the importance of sticking to investment strategies and avoiding emotional decisions based on market trends or hot tips.
While index funds and ETFs are preferred for long-term investments due to their lower fees and passive tracking of indices, Heri acknowledges the appeal of exploring other investment options for a small portion of one’s portfolio. This includes areas like digital currencies such as Bitcoin, which he considers speculative investments. He advises investors to remain skeptical of high-return promises and seek financial knowledge before making any informed decisions.
In summary, Heri’s principles emphasize strategic diversified patient investing for building wealth over time while remaining cautious of speculative opportunities, following these rules can help increase assets steadily navigate complex financial markets with confidence.
