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RESEARCH07 January 2023

How to minimize risk in asset management - 5 mistakes you should avoid

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Martin Velten


07 January 2023




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It's no secret that humans are prone to emotional fluctuations and this can also be reflected in their investment decisions. But these emotional decisions can put your wealth at risk. At Smart Wealth, we understand that there needs to be a solution that compensates for these human weaknesses. With our systematic approach and the support of our innovative AI technology, you can be sure that your wealth is being managed safely and successfully. Read our latest blog post to find out how to avoid the five biggest mistakes in investments. Click here now to learn more.

How to minimize risk in asset management - 5 mistakes you should avoid

The five biggest mistakes in asset management - how to prevent them with a systematic approach

People naturally tend to avoid risk. This is true in all areas of life and especially when it comes to investing. A lot of assets still remain in cash, current or savings accounts and do not yield any interest. Instead, more and more credit institutions and banks are charging penalty fees on high deposits and the high inflation rates are additionally increasing the loss of assets. There are certainly many ways to make mistakes when investing money. We have summarized the five biggest ones and a possible solution for you.

Mistake number 1: not investing in the stock market at all

Those who continue to rely purely on fixed-interest and risk-free investments in the current low-interest phase are losing money. Most products yield far below the average inflation rate. A long-term positive inflation-adjusted return of your investment can currently be achieved only by inviting in the stock market.

Mistake number 2: selling during crises

Think long-term. Even with short-term losses, stocks are superior to many other forms of investment in the long-term. Refrain from emotional decisions to sell when prices are falling. Even most professional market participants rarely find the right time to sell. Over a longer period of time prices will recover again.

Mistake number 3: not having an investment plan

Think in advance about the goals you want to achieve with your investments. Are you planning a slow but continuous growth of your investment with only minor fluctuations or are you prepared to take higher risks and achieve a better return? You should plan an investment horizon of at least 5 to 7 years for your equity investments.

Mistake number 4: not diversifying

Always spread your investment over a larger number of investment instruments. Not only in Switzerland, but also in most other countries investors tend to invest mainly in their own stock market. However, a worldwide diversification of investments makes sense and is absolutely necessary in the now highly globalized markets. The same applies to the distribution among different asset classes. Do not only rely on stocks, bonds or precious metals are also possible investments that can protect you against losses.

Mistake number 5: pursuing the wrong investment strategy

Following the wrong investment strategy is as bad as not following a strategy. If you are safety-oriented and get a bad feeling when you experience losses in the meantime, you should avoid riskier investments and focus on investments with low volatility and continuous appreciation.

Avoid investment mistakes with artificial intelligence

At Smart Wealth, we take a comprehensive approach when making investment decisions. Our self-learning algorithms have been helping investors make smart investment decisions for more than 20 years. Our products achieve excess returns of up to 17.40 % compared to the benchmark, and the maximum losses within an observation period of more than 18 years are up to 60 % lower. The so-called "sharpe ratio", which evaluates the relationship between the return and volatility of an investment, is between 1.00 and 1.39 for the AI-supported investments of Smart Wealth. Values above 0.50 can already be considered as very good.

From wealth management to wealth optimization: The new standard in the investment industry

Are you tired of feeling uncertain about your investments? Do you struggle to keep up with the ever-changing market trends and geopolitical events? Let us introduce you to Smart Wealth, the revolutionary AI-powered investment platform that takes the guesswork out of investing.

Our cutting-edge technology uses a combination of market data and genetic optimization to create a personalized investment strategy that aligns with your goals and risk tolerance. With our AI-driven algorithms, you can rest easy knowing that your portfolio is being monitored and adjusted 24/7, taking into account any sudden changes in the global market.

But we understand that you are more than just a number on a spreadsheet. That's why we provide you with a dedicated personal advisor to guide you through the process and answer any questions you may have. And with our scalable platform, we can accommodate even the most complex investment structures.

Imagine waking up every morning, knowing that your wealth is being managed by a sophisticated AI system that never sleeps and never makes emotional decisions. Imagine having the freedom to focus on the things that truly matter to you, while your investments are growing in the background.

Don't wait any longer, join the Smart Wealth community today and experience the future of investment management. Click here to schedule a consultation with one of our advisors and take the first step towards a smarter, more secure financial future.