Reichmuth’s Warning Against Dollar and Euro Bonds
The private banker Christof Reichmuth from the Lucerne private bank Reichmuth significantly deviates from the prevailing opinion of many industry experts with his strategy for asset protection. While many financial experts, such as Yves Bonzon from Julius Baer, recommend a bond allocation of 35 percent for Euro portfolios, Reichmuth explicitly advises against investments in nominally yielding government bonds from the Dollar and Euro zones.
Justification for Reichmuth’s Position
Reichmuth warns of the high levels of debt in the USA and Europe, which he sees as a threat to purchasing power. He particularly considers the US Dollar and the Euro as “soft currencies” and points out that in a crisis scenario, inflation could further rise due to necessary support programs for the financial system, jeopardizing the preservation of purchasing power through nominally yielding bonds.
Alternative Value Storage
Instead of bonds, Reichmuth recommends three alternative asset classes:
- Real Estate: These are considered inflation-protected and can generate stable returns. Open real estate funds and REITs are particularly noteworthy in this context.
- Precious Metals: Especially gold is a proven store of value that offers protection against currency risks and inflation.
- Commodities: They also provide protection against inflation, especially in times of economic uncertainty.
Relevance for Investors
Reichmuth’s approach is particularly important for investors who must orient themselves in a changing interest rate environment. Increasing debts could lead to higher inflation, while higher interest rates may make bonds more attractive, but could simultaneously burden other investments. Reichmuth’s recommendation for alternative investments such as real estate or precious metals underscores a defensive strategy for protecting assets.