A well-constructed portfolio is more than the sum of its parts. The key insight from modern portfolio theory is that combining assets with imperfectly correlated returns lowers overall volatility without sacrificing expected return. A 60/40 stock/bond mix delivered roughly the same long-term return as 100% stocks over 1985–2020 but with two-thirds the volatility.
A typical Swiss household portfolio includes pillar 2 pension assets, pillar 3a vested benefits, a brokerage account holding ETFs, possibly a directly held property, and an emergency cash buffer. The trick is to view all these positions as one unified portfolio rather than five silos, so total asset allocation matches the family's risk profile and goals.
Review the portfolio at least once a year. Rebalance back to target weights when any asset class drifts more than 5 percentage points from its target — this enforces 'buy low, sell high' mechanically. Avoid daily checking, which tends to provoke emotional trading at exactly the wrong moments.
A CHF 500,000 portfolio is held as: CHF 300,000 in a global equity ETF (60%), CHF 150,000 in a global bond ETF (30%), CHF 50,000 in a money-market fund (10%). After a strong equity year the split has drifted to 67/26/7; rebalancing sells CHF 35,000 of equities and buys bonds and money-market to return to target.