Time Horizon
Why the date you'll need your money decides how much risk it can take, and how the range of results from Swiss shares narrowed the longer they were held.
Key idea
Your time horizon is how long until you need the money. The longer it is, the more time a bad year has to be made up. From 1900 to 2025, Swiss shares lost money in 37 of 126 single years but in none of 107 twenty-year periods, where even the worst grew 0.7% a year. That's history, not a promise, and money you need soon can't wait out a fall, which is why it usually isn't put into shares.
What it is
Your time horizon is how long until you need the money. A deposit for a flat you want to buy in two years has a short horizon; savings for a retirement thirty years away have a long one. It matters because a fall can only be waited out if you don't have to sell in the middle of it.
The longer you hold, the narrower the range
Swiss shares show it clearly. For each length of time (1, 5, 10 and 20 years) and every starting year from 1900, here are the worst and the best results. Each is the yearly return over that stretch, compounded: the steady yearly rate that turns the starting amount into the final one:
- Held for 1 year: −34.0% to +61.4%
Lost money in 37 of 126 periods
- Held for 5 years: −10.4% to +25.8% a year
Lost money in 19 of 122 periods
- Held for 10 years: −4.2% to +20.2% a year
Lost money in 8 of 117 periods
- Held for 20 years: +0.7% to +13.7% a year
Lost money in none of 107 periods
Held for 1 year, shares returned anything from −34.0% to +61.4%, and lost money in 37 of 126 years. Over 5 years the range narrowed to −10.4% to +25.8% a year, with losses in 19 of 122 periods. Over 10 years it was −4.2% to +20.2% a year, with losses in 8 of 117. Over 20 years the worst result was still +0.7% a year and the best +13.7%, and none of the 107 periods lost money.
In francs: CHF 10,000 put into Swiss shares at the start of the worst five years, 1917 to 1921, was worth CHF 5,788 at the end. Over the worst twenty years, 1902 to 1921, it grew to CHF 11,472. The figures are our calculation from Pictet's study of Swiss equities since 1900.
Matching money to when you need it
That's why people often sort their money by when they'll need it. A common way to think about it:
Within a few years
A fall can't be waited out: even over five years, shares lost money 19 times. Money for a deposit or next year's tax bill usually sits in savings.
In five to ten years
Losing stretches were rarer but still happened, 8 times in 117 ten-year periods. A mix of shares, bonds and cash softens them.
Twenty years or more
In every 20-year stretch since 1900, bad years were made up by the end. That's history, not a guarantee. Retirement savings often have a horizon like this.
How much of each you hold is your asset allocation, and the shorter the horizon, the more the year-to-year swings matter. The trade-off behind it all is the one between risk and return.
The honest caveat
Past ranges aren't a forecast. The worst 5-, 10- and 20-year periods all include the First World War and the slump after it, while the worst single year was 2008. The periods also overlap: 1900 to 1919 and 1901 to 1920 share 19 years, and only six separate 20-year spans fit into 1900 to 2025. So "none of 107" rests on a handful of truly separate cases, not on 107.
After inflation the picture is less comforting: 10 of the 107 twenty-year periods lost buying power, most recently 1962 to 1981 and 1963 to 1982. A single country's market can lag for decades. And a horizon can shrink without warning, with a job loss or an illness; an emergency fund keeps that from forcing you to sell.
Swiss note
Money in Pillar 3a is paid out at the earliest five years before the reference age (the official retirement age, 65 for most people), and earlier only for a few reasons, such as buying a home you live in, leaving Switzerland for good or starting your own business (the rules in 2026). For someone aged 30 that's a horizon of decades, unless the money is meant for a home in a few years: then the horizon is only that long. For each savings goal, note when you'll need the money.
Key takeaways
- —Your time horizon is how long until you need the money.
- —From 1900 to 2025, Swiss shares lost money in 37 of 126 single years but in none of 107 twenty-year periods.
- —Those 107 periods overlap, so they rest on far fewer independent cases than it sounds.
- —After inflation, 10 of the 107 twenty-year periods still lost buying power.
Related concepts
Volatility
Why the road to higher returns is bumpy, and when the bumps matter.
Asset Allocation
Stocks, bonds and cash: the split that decides your ride.
Risk and Return
More risk buys the chance of a higher return, not the promise.
Market Timing
Missing a few of the best days costs more than you'd expect.
Emergency Fund
The cash that keeps a bad month from becoming a forced sale.