Topic: How To Invest

Q: Pat, I want to invest in Swiss stocks and was wondering what your thoughts are on Switzerland, in general, and the iShares MSCI Switzerland ETF, in particular? Thank you.

Article Excerpt

A: Switzerland has a strong economic system where the country’s revenue exceeds its expenses, so there is no deficit. That improves its self-reliance and the stability of its currency. The country also has flexible labour markets, high productivity and an emphasis on high-value exports that are not particularly sensitive to price competition. At the same time, the strong currency raises purchasing power for domestic households and businesses. Surrounded by member countries of the eurozone, Switzerland also has close economic and political ties with its larger EU neighbor-countries. These ties and relationships began with one free trade agreement established in 1972. This was followed by more than 100 bilateral agreements that permit the free flow of Swiss citizens into the workforce of the European Union and the gradual opening of the Swiss labour market to citizens of the EU. With the two economies so closely linked, if the eurozone slows, Switzerland slows as well. The Swiss economy likely showed stronger-than-expected 2.7% growth in 2018. That…