How do I invest correctly? 4 Do’s, 2 Dont’s
May 23, 2024
5 min read
arvy's Teaser: Can I be a good investor? Yes. You don't need secret knowledge, a finance degree, or perfect timing. You need a plan, some discipline, and the willingness to think long-term. This article shows you the 4 things good investors do — and the 2 mistakes they avoid. With Swiss numbers and the honest perspective of a founder who learned these lessons himself.
What I Regret
I should have started earlier. That's my biggest financial regret. Not that I bought the wrong stock. Not that I missed a crash. But that I left money sitting in a savings account for years because I thought I needed to understand everything before I was allowed to begin.
The truth: perfect knowledge isn't a prerequisite. Starting is the prerequisite. Everything else you learn along the way.
What Makes a Good Investor?
Many people believe good investors know secrets that others don't. They pick the right stocks, enter at the perfect moment, and have a supernatural feel for markets.
The reality is much more boring — and much more reassuring: good investors are defined by habits, not genius. They have a plan, stick to it, and let time do the work. Anyone can do that.
4 Things Good Investors Do
1. They Have a Plan
Before you invest a single franc, answer three questions:
What for? Retirement, a home, financial independence, your child's education?
How long? 5 years, 15 years, 30 years?
How much? CHF 200/month, CHF 1,000/month, a lump sum?
The plan doesn't need to be perfect. It needs to exist. Because without a plan, you're not investing — you're speculating.
A Realistic Swiss Plan
Goal: wealth building for retirement. Time horizon: 25 years. Savings rate: CHF 605/month into Pillar 3a (maximum CHF 7,258/year) + CHF 400/month freely invested. Total: CHF 1,005/month. At 7% average return, that's roughly CHF 810,000 after 25 years — from CHF 301,500 contributed. (→ arvy Investment Calculator)
2. They Diversify
Don't put all your eggs in one basket. Sounds obvious, yet it's constantly ignored. If you put all your money into a single stock, you're playing the lottery. If you spread broadly, you massively reduce risk — without sacrificing returns.
Diversification means: different companies, different sectors, different regions. A portfolio of 30–50 quality companies worldwide or a broadly diversified ETF holding 1,500+ companies — both work. (→ Beginner's Guide)
3. They Stay the Course
Once the plan is in place, your job is simple: stick with it. Invest month after month. Don't stop when prices fall. Don't suddenly change everything because someone on TikTok recommended a hot stock.
Consistency beats brilliance. The most boring investor in the room is often the most successful one.
The Savings Plan Principle in Practice
You set up a standing order: CHF 500 every month, automatically invested. Whether the market is up or down. Sometimes you buy higher, sometimes lower. Over 20 years, this lowers your average entry price and eliminates the most dangerous factor: your emotions. This is called Dollar-Cost Averaging — and it works.
4. They Keep Learning
No investor knows everything. Just as the world changes, so do markets. Good investors stay curious: they read, they ask questions, they understand the companies they invest in.
This doesn't mean reading financial news every day. But understand what you own. Understand why you own it. And understand that volatility isn't a reason to panic — it's part of the game.
2 Mistakes Good Investors Avoid
Don't 1: Don't Try to Time the Market
"I'll wait until prices drop." Everyone says this. And almost everyone misses the best days in the market while waiting.
Here's the truth: nobody knows when the market will rise or fall. Not you, not me, not the analysts on TV. And the data is brutally clear: time in the market beats timing the market — almost always.
What Happens When You Miss the Best Days?
CHF 10,000 invested in the MSCI World, held for 20 years (2004–2024):
Stayed fully invested: ~CHF 42,000
Missed the 10 best days: ~CHF 21,000
Missed the 20 best days: ~CHF 13,000
The best market days almost always come right after the worst ones. If you panic-sell, you miss exactly the recovery.
Here's the thought experiment I like to do: imagine you invest CHF 10,000 — and the next day, the market crashes 30%. Your account shows CHF 7,000. Feels terrible. But if you stay invested and keep contributing CHF 250 per month, the difference after 30 years is only about 8% versus someone who timed the entry perfectly. 8% — for the absolute worst timing imaginable. (→ arvy Investment Calculator)
Lesson: Market timing is a fool's game. What matters most is starting the journey.
Don't 2: Don't Make Emotional Decisions
A portfolio drop feels like a punch to the gut. That's human. But decisions made from fear — panic selling, suddenly reshuffling everything, leaving the market — are almost always expensive.
Biggest Crashes — and What Came After
| Crisis | Decline | Recovery |
|---|---|---|
| Financial Crisis 2008 | –55% | ~4 years to pre-crisis level |
| Covid Crash 2020 | –34% | ~5 months |
| Inflation / Rate Hikes 2022 | –20% | ~1 year |
Anyone who panic-sold during any of these crises missed the subsequent recovery. Those who stayed invested — or even bought more — are far better off today.
Think of stocks as being "on sale" when prices drop. You'd be happy if your favourite restaurant offered 30% off — why not your investments?
Your Swiss Roadmap: The Priority Order
Investing right also means investing in the right order. In Switzerland, there are instruments that the government partially subsidises. Use them — before you invest freely.
1
Pay off expensive debt (consumer loans, credit cards — not your mortgage)
2
Emergency fund: 6 months of expenses in a savings account (→ Budget Guide)
3
Max out Pillar 3a: CHF 7,258/year — invested, not parked (→ 3a Guide)
4
Check PK buy-in: Biggest tax lever for medium/high incomes (→ PK Guide)
5
Free investing: Everything beyond — long-term, in quality (→ Savings Plan)
Swiss Advantage
Private capital gains in Switzerland are tax-free. And the 3a contribution saves you CHF 1,500–4,000 in taxes immediately every year. It's the only investment that's partially funded by the government. (→ Tax Guide)
The First Step: Save Before You Invest
Investing starts with saving. Not the other way around. Don't spend what's left after expenses — invest what you've committed to, and live on the rest.
The question isn't: "Can I afford to invest?" The question is: "Can I afford not to?"
A simple starting point for Switzerland:
| Category | Share | Example (CHF 6,000 net) |
|---|---|---|
| Fixed costs (rent, health insurance, taxes, transport) | ~55% | CHF 3,300 |
| Living costs (food, leisure, clothing) | ~25% | CHF 1,500 |
| Investing (3a + free) | ~20% | CHF 1,200 |
Switzerland is expensive, so the fixed-cost share is higher than the classic US "50-30-20" rule. What matters: the 20% savings rate is the minimum target. Everything above is a bonus. (→ Budget Guide with real numbers)
When Should I Start?
Now. Not tomorrow, not "when the market corrects," not "when I earn more." Now.
The earlier you start, the more compound interest works for you. Start at 25 and you have 40 years until retirement. Start at 35 and you have 30. That 10-year difference doesn't cost you 25% of your final wealth — it costs you nearly half.
CHF 500/Month Invested at 7% Return
Start at 25: After 40 years → ~CHF 1,320,000 (from CHF 240,000 contributed)
Start at 35: After 30 years → ~CHF 610,000 (from CHF 180,000 contributed)
Start at 45: After 20 years → ~CHF 260,000 (from CHF 120,000 contributed)
Starting 10 years earlier doubles your final wealth. That's the power of compound interest — and it doesn't wait for you.
arvy's Take
Good investors aren't defined by genius. Not by large sums. Not by secret knowledge. They're defined by four simple habits: Have a plan. Diversify broadly. Stay the course. Keep learning. And they avoid two mistakes: Trying to time the market. Making emotional decisions.
The hardest part of investing isn't the theory. It's the first step. Everything after that gets easier.
I'm convinced: anyone can be a successful investor. Not despite the simplicity of these rules — but precisely because of it.
Ready for the First Step?
With arvy, you invest in quality companies — via savings plan from CHF 1, or as a lump sum. Pillar 3a and free investing in one app. No hidden fees. And if you have questions: we're here.
Disclaimer: This article is for general information purposes and does not constitute personal investment advice. Historical returns are not a guarantee of future results. Investments in securities involve risks, including possible loss of invested capital. arvy is a FINMA-regulated asset manager.
