May 4, 2018

Swisscom cheap & safe



Today, the Swiss telecommunications company Swisscom showed up in my personal top 10 list of the best companies in the DACH region. This surprised me, as 51% of Swisscom stocks belong to the Swiss Confederation – which is why they are also called “federal bonds” – and should, therefore, be expensive.

What they shouldn’t be is cheap “value” stocks. Because secure stocks with good dividends are in demand.

Swisscom is definitely secure because the federal government, as the main owner, demands good dividends and thus protects Swisscom's business model as long as it works. In other words: Swisscom investors are backed by the Swiss Confederation.

And therefore have secure shares in their portfolios.

It’s hard to understand why these stocks are suddenly cheap. The experts from “Finanz und Wirtschaft” and “Cash” don’t understand it and recommend buying the stocks.

I can only think of one reason against that: If you already own a large number of Swiss assets. This doesn’t apply to myself, my assets are mainly foreign ones because Swiss stocks as a whole are expensive.

The investment, therefore, makes sense for me. I’m buying 10 shares of Swisscom for a total of around USD 4,700, which completes my third portfolio of USD 100,000.

This took me over one year because I decided at the start of 2017 that I will only invest slowly since a correction of the stock market is likely and I want to have money left to invest once the prices fall.

I will use the same strategy for my fourth portfolio, which I want to invest in 2018-2019.


All Insights

Collections with all insights
per topic
Top 10 Stocks

No judgments - Just financial facts
For 10,000 stocks from 100 markets