Bad news : the recent price increase could settle long term. A hard blow to certain investments.
inflation had virtually disappeared from the landscape, but, since this summer, the situation has changed. The index of consumer prices reached an annual rate, 2.3 percent. A trend that does not seem near to stop, the Bank of France in anticipation of inflation to 2.1% in 2018, compared to 1 % in 2017.
A blow to savers, particularly for holders of a Livret A, whose compensation has stagnated at 0.75 %. Facing this new situation, to preserve the value of their savings, the French need to adapt their asset management strategy. Their priority : to focus on investments that offer higher yields at 2.1 %. Not so easy in a low interest rate environment is more favorable to borrowers than to savers. But it’s not impossible.
re-orientate its strategy heritage
First track : the real estate rental. The same causes producing the same effects, if rents follow the growth curve of price, rental investments can be a bulwark sustainable against inflation. With the levels of rate current loan, below 1 % for the best files, we can play the leverage of the credit for building up a capital at a lower cost.
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a Second runway, in the same vein : the subscription of units in real estate investment trusts (REITS), cash or credit. Also called “stone paper”, their performance varies on average between 3 and 4 % per year. Attention, here, as for the real estate live, the length of detention recommended exceed ten years. In addition, in order to limit the risk of losses in the event of a turnaround in the market, you must be ultra-selective. Tell you in particular about the choice of assets, their geographical distribution, the age of the property, occupancy rates, capitalization, performance, and valuation of the units on the shelf.
Practice >> check out the investment REITS in partnership with CORUM’s SAVINGS
The good plan of the former PEL
the Third option : a first option is to boost your life insurance contract, even if the preferred investment of the French has the lead in the wing. The euro funds – the only ones that guarantee the invested capital – has reported an average of 1.8% in 2017 and are not expected to do better in 2018. Is less well as inflation expectations. However, it is possible to limit the damage by targeting the best funds in euros. Sold without the right of entry and to fee lighter on the Internet, they generate returns of 2 % and more.
a Second option is to make compromises on his contract by opting for units of account (UA) invested in shares or REIT. Depending on your risk aversion, it will be necessary to limit this fraction to be between 5% and 20% of its portfolio. As, if hopes of gains with the CPU are higher than in the euro funds, the potential for losses exist also. In the same vein, the choice of a “management driven”, including a profile, “conservative”, in principle, allows to derive the performance of his contract up.
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life Insurance rates / returns contracts
Two types of life insurance are worth more than a life Insurance : how to earn more life Insurance : what to do in the face of declining rates?
Finally the fourth and last track : the old plans housing savings (PEL). Those opened between August 1, 2003 and January 31, 2015 earn 2.5% of the gross out award of State and up to 4.50 % off premium if they were subscribed for between July 1, 1985 and 15 may 1986. The bankers don’t shout from the rooftops, but the PEL prior to 1 march 2011 have no expiry time (against a limited duration of ten years from this date). Thus, the initial interest rate shall remain vested as long as the plan continues.