The third quarter continued this year's series of pleasing returns. Over the summer months, the gold and Swiss real estate fund asset classes in particular advanced. Swiss equities, in turn, caught up somewhat against global equities. Nevertheless, the latter have still delivered the highest return so far in 2024.

The Swiss franc, which had been weak until then, was able to reduce a significant part of its annual loss against most currencies. This is no coincidence. Switzerland has been regarded as a haven of stability for decades. It is almost seen as a law of nature that the Swiss franc always strengthens when global tensions (geo)politically, militarily or economically increase.

In particular, political risks have recently come into the focus of many investors. In addition to the wars in Ukraine and the Middle East, an extremely controversial election campaign for the US presidency is also underway. We are currently getting daily tips on which investments are the best depending on the outcome of this election. It is easy to lose track. Our recipe for this is simple: it is best to do nothing and stick to your strategy.

Review

Almost all traditional main asset classes contributed to the political performance (in CHF) in the third quarter:

• Gold: +5.8%

• Swiss real estate funds: +3.6%

• CHF corporate bonds: +1.9%

• Swiss equities: +1.7%

• Swiss government bonds (3-7 years): +1.3%

• Global equities: -0.4%

As a result, every continuously invested findependent portfolio achieved a positive return in the third quarter of 2024. This is very pleasing.

Investors experienced a rollercoaster of emotions in recent months. In August, all risky assets, led by Japanese equities, lost value, at times even in the double digits. However, almost all asset classes recovered subsequently. In particular, a series of economic data from the US, by far the most important economic region, continue to point to robust growth. This usually provides a good foundation for rising prices.

Assessment

In the financial markets, (almost) everything is actually possible at any time. We therefore like to repeat this sentence here. Forecasts should always be taken with caution.

This also applies in particular to predictions of political events, such as this year's US presidential election on November 5th. It is best to carry out a small thought experiment on this. In order to be able to make money with pre-selected investments, investors would have to make at least the following assumptions correctly:

• Who will be president?

• Has the president's party achieved a majority of seats in 0, 1 or 2 chambers of parliament?

• Are these majorities wafer-thin, narrow or clear?

The elected person, for example, can only implement their central campaign promises if their party clearly dominates both chambers of parliament or at least one and the other has tight conditions.

Of course, this person must also actually want to realize their campaign promises. Depending on the plan, this may also require financial resources that are not even available. In addition, a variety of possible external events could also push all plans into the background again.

Finally, to really benefit on the stock market, it would be beneficial if the majority of investors also speculated on an alternative scenario and no other global event influenced stock market prices in the post-election period.

In short, there are far too many variables to consider.

What does this mean for investors now?

A well-known stock market wisdom says that "political stock markets have short legs": elections and their outcomes can cause short-term irritation on the markets, but they usually have hardly any influence on the performance of global assets in the medium and long term (with the exception of extreme parties taking power and immediately confiscating private assets).

With a view to the US elections, we therefore recommend our clients not to make any changes to their portfolios.

Outlook

We do not make forecasts. Our recipe is and remains simple. Invest long-term, broadly diversified and cost-effectively.

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