Invest in shares | Paper Jam news

While key bank rates rose by 25 basis points in July (before another hike in September, as announced by the European Central Bank), historically they have never stayed so low for so long. Placing your money in an interest-bearing savings account is no longer very profitable, and most people prefer to protect their capital or even grow their wealth in other ways. Real estate, the stock market, life insurance, art, collectible watches, or even the metaverseā€¦investments take many forms and can be unexpected. Every Tuesday, all summer long, Paperjam is giving you keys.

Investing in stocks is one way to place money in the financial markets and make a profit by choosing the level of risk you are willing to accept. Of course, the return on this asset class is proportional to the level of exposure to market volatility. Investing in shares means buying shares of companies that are listed on the stock exchange, in other words, buying shares of ownership in companies. Each share represents a share of the company’s capital. By issuing shares, a company sells shares of its capital to investors to raise funds to finance its growth. If positive, shareholders are rewarded in the form of dividends paid annually or quarterly. This profit is proportional to the growth and volume of their investment. This can allow them to make capital gains, therefore, in the long run, more money than was initially invested. Shares may also be subject to market fluctuations and may not provide short-term returns. This is why this asset class is not a stable or guaranteed source of income, but an investment. Due to its variable nature, it changes depending on the company’s performance and dividend policy. It is therefore important to be well informed about asset acquisitions, the competitive position of companies and the geopolitical context that may affect them.

What products, what profitability?

An individual can invest in a PEA (Equity Savings Plan) through their bank, brokerage or online investment organization. PEA allows you to invest directly in selected stocks. This type of savings provides capital gains over the medium term (5 to 10 years) and remains profitable as long as you have a high risk tolerance and diversify your portfolio well. Most banks now offer thematic equity funds that match their commitments, as well as economic issues identified by each bank as current or future (the fight against global warming, technology, emerging markets, etc.).

By turning to UCI, mutual investment companies (funds, Sicavs, etc.), the lay investor receives regulated management and asset portfolios are diversified, which makes it possible to mitigate the consequences of possible crises.

Retail banks in Luxembourg also offer a self-investment management service through their mobile app (Self Invest at BGL BNP Paribas, R-Gestion at Raiffeisen, etc.). Finally, for those who already have knowledge of the stock market, there are many trading platforms such as eToro or Trade Republic that offer independent and live management of the assets involved via a mobile device.

However, it should be noted that in the context of persistent inflation in Europe and the consequences of the war in Ukraine, stocks are not necessarily cheap with very high valuation multiples. But for an investor who wants to preserve their purchasing power in the medium to long term, they are still the best way to go, according to observers.