Faced with galloping inflation and the war in Ukraine, the French are worried about their savings. What types of investments to favor: Midi Libre takes stock.
War in Ukraine, inflation, recession… How to protect your money during these difficult times? A survey by Cercle de l’épargne/Amphitéa in partnership with AG2R La Mondiale published on Monday 29 March highlights the appetite of the French for “precautionary savings”. This savings is a reserve of money that one builds up to face unforeseen expenses. According to the survey, more than two-thirds of French people (70%) save, including nearly three-quarters of young people (77%).
What types of investments should we turn to following these events that are disrupting our finances?
1. Booklet A, LDDS and LEP
Regulated savings accounts offer several advantages. They are secure, tax-exempt, and their liquidity is total. You can withdraw the funds at any time. On February 1, the ceilings for these investments reached €22,950 for the A booklet and €12,000 for the LDDS.
The passbook A rate was raised to 1% in February. Despite a return lower than inflation, the French rushed to this investment as soon as this boost was announced (+ 9.1 billion euros in net inflows in January and February), reports Le Figaro.
On the side of THE P (popular savings account), it offers a higher yield of 2.2% for a ceiling of €7,700. However, it is accessible under certain income conditions: €20,296 per year for a single person and €25,716 per year for a couple without children.
According to Dossier familial, funding your old housing savings plan can be a good solution. On average, the ELP opened before 2015 would earn 2.5% gross, 2% for plans opened between February 1, 2015 and January 31, 2016 and 1.5% for plans opened between February 1 and July 31, 2016.
The maximum amount you can place on your PEL is €61,200. But beware, as our colleagues from Le Figaro remind us, it is no longer possible to supply them if they were opened more than ten years ago.
3. Life insurance
Life insurance is the favorite financial investment of the French, according to the Circle of Savings survey. Some euro funds offered returns around 2% for the year 2022, reports Le Monde. But the trend is towards lower interest. According to our colleagues, “after the rate bonuses and the restrictions on access to funds in euros, insurers are now interested in the creation of partial guarantee funds”.
According to investment adviser Karl Toussaint du Wast to our colleagues at TF1, “you must therefore put at least half of your savings in safe investments such as life insurance”.
4. Real Estate
Real estate is seen as an investment the most interesting by 65% respondents, ahead of life insurance (59%) and equities (46%). The rise in the cost of living can be passed on to rents. Housing loan rates are still well below inflation, explains Le Figaro. Under these conditions, borrowing remains advantageous. “Those who can must go into debt. Due to negative real rates, credit is today a lever for creating wealth”, underlines Philippe Parguey, at Nortia to our colleagues.
5. Cryptocurrency, Bitcoin
“More daring than their elders, the younger generations are more inclined to take risks in terms of investments: 18/24 year olds, for example, are 84% consider profitable stocks and 81% think the same for bitcoin“, explains the investigation of the Circle of savings. But we must be vigilant: these products are not controlled by any supervisory authority and can collapse in a few days following an unfortunate declaration or a rumor (as happened before with Elon Musk’s tweets).
“The common idea of all people who buy gold is not to make money, it’s more to protect their savings and protect them from inflation“, explained Antoine Tahar, stockbroker at TF1. According to Capital, gold has progressed markedly, returning to 2,000 dollars an ounce. But the yellow metal is not accessible to all portfolios.
7. Stocks, Stock Market
Investing in the stock market, yes, but in the short term, for the moment.