"Fear eats up returns" Every second person leaves money lying around and doesn't realize it

The Swiss population only invests part of their savings - and thus risks having less money in the long term. These are the findings of a study by Lucerne University of Applied Sciences and Arts. The fear of losses is the main driver.

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The Swiss stock market has performed magnificently over the past 30 years. Those who invested broadly were able to enjoy annual returns of around eight percent in many places. Those who left their money in a savings account, on the other hand, had to be content with interest rates of around 0.9 percent.

But returns are apparently not everything: a new study by Lucerne University of Applied Sciences and Arts (HSLU) in collaboration with Luzerner Kantonalbank shows that around half of the Swiss population still does not invest voluntarily. The study, which was reported on by SRF last week, caused quite a stir.

The main reason for this? Fear of losses. According to the study, this is the strongest inhibiting factor - even ahead of a lack of interest or trust in banks. People with a lower level of education and less start-up capital are particularly affected. "The fear of loss has to be taken seriously, but it has to start with knowledge," says study co-author and finance professor Simon Amrein in an interview with blue News.

Some population groups find it particularly difficult to invest

Although there is support for this today, the basic knowledge is often lacking. "Financial education should start at school," Amrein therefore demands. The differences between genders and educational levels are striking. Anyone who does not understand the compound interest effect, for example, will hardly realize how much loss of purchasing power "security" in a savings account means over time. "Above all, we should consider how we can strengthen financial education in Switzerland. Those who know more make better decisions," says the finance professor with conviction.

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The HSLU study also shows that it is mainly people with a lower level of education and lower assets who are reluctant to venture into the stock market. The effort involved in getting started or the worry of having to constantly react to developments also blocks many people.

But it is precisely this "hyperactivity" when it comes to stock market fluctuations that is the real problem for many investors, says Patrik Schär, CEO of financial services provider Selma. "Emotions are simply very bad investment advisors. The fear of missing out and the fear of loss lead to wrong decisions more often than anything else."

Desire for personal contact remains

This is where digital asset managers - so-called robo-advisors - come in. They promise to guide people through market phases in a structured and disciplined way and protect them from making bad emotional decisions. "An algorithm doesn't get stressed when the stock market falls. Nor does it think: Today I'm going to try out something I saw on the internet. It reliably does what it's supposed to do," says Schär, who has developed such a robo-advisor with Selma Finance.

This also includes a clear message: not every market downturn is a crisis. And a short-term slump is not necessarily a signal to sell, but often an opportunity.

But for many people, the desire for personal support remains despite digital solutions. Financial services provider Selma is therefore also focusing on hybrid offerings: Robo-algorithms for objective portfolio management - and advisors in webinars and meetings for personal trust. "The future is not man versus machine, but man and machine," says Schär with conviction.

Finance professor Amrein also believes that personal contact remains essential. He believes the banks have a great responsibility. "They must use their high level of interaction with customers to better meet their needs." But this is precisely where they often fail: "A key challenge is getting into a discussion with non-investors in the first place. Many find this difficult. Precisely because many people are not interested in financial topics."