Unhealthy strength of the Swiss franc

Last week we welcomed the rebound of the dollar, which helped restore some colour to the performance of our portfolio. This week we already have to be disillusioned, so much The Swiss franc is breaking all records. This particularly unhealthy strength of the CHF weighs not only on the profitability of our portfolio, but also on that of Swiss exporting companies. This is particularly the case in the machinery industry, whose demand is more price elastic than that of pharmaceuticals and especially luxury goods.

Under these conditions, it is very difficult for a Swiss investor to generate decent performance, whether investing in the SMI (filled with international values) or abroad. Even small caps active only on Swiss territory are indirectly affected by the strength of the CHF since many are subcontractors of large exporting companies. A false good idea could be the purchase of a Swiss luxury value, such as Richemont (SWX:CFR). However, its current PER stands at 28.43, the yield is 0.82% and the dividends do not show historical stability. So there is clearly speculation not only on the Swiss franc but also on Swiss stocks that are not very sensitive to its rise. Quant à l'real estate helvétique il navigue lui aussi dans une jolie bulle, profitant de taux historiquement très faibles et des mauvaises performances boursières.

Finally, all we have to do is arm ourselves with patience and take advantage of this strength of the CHF to buy foreign securities at a good price. This is after all the basis of any long-term value-oriented investment. We also console ourselves by saying that by taking the euro as the reference currency, the performance of our portfolio est meilleure que celle du CAC 40, avec moins de volatility.

Another small source of satisfaction is that we are soon entering a dividend distribution period again, which will increase our passive income. CenturLink, however, announced a dividend that was once again unchanged., à 0.725 USD. Pour rappel, ce montant n'a plus évolué depuis mars 2010. Il ne  reste donc plus que deux distributions cette année à la société pour ne pas interrompre 37 années consécutives d'augmentation du dividende ! Le distribution ratio actuel s'élevant à 97.41%, cette mission s'avère donc particulièrement délicate.