Professor Erwin Heri has provided key rules for building wealth through investing in stocks, index funds, and the concept of Sitzfleisch. In his book “The Eight Commandments of Investment,” Heri offers insights that are still relevant today, even with the emergence of new investment opportunities like Bitcoin.
Heri emphasizes the importance of not leaving money idle in bank accounts and encourages conscious saving, particularly with stocks, to yield better returns over the long term. He believes that a patient, long-term investment strategy is key to accumulating wealth and advises against market timing and focusing on diversification to mitigate risks.
While Heri acknowledges the potential of Swiss stocks, he also highlights the need to diversify by investing in different asset classes and avoiding excessive individual stock risks. He advises against hedging currency risks when investing abroad as it can impact portfolio fluctuations and reduce returns.
By suggesting the use of index funds and ETFs, Heri emphasizes low fees as a crucial factor in long-term wealth creation. He recommends defining individual investment structures, sticking to predetermined fund allocations, and refraining from frequent trading to maximize the compounding effect of investment income.
In addition to conventional investment options, Heri sees room for exploration with digital currencies like Bitcoin as long as it remains a small portion of the portfolio. He cautions against unrealistic promises of high returns and advises investors to improve their financial knowledge to make informed decisions.
Overall, investing requires discipline, skepticism, and a long-term perspective. By following Heri’s rules and adapting to the changing investment landscape individuals can position themselves for financial growth and security over time.
