Not sure where to put your money in this time of uncertainty? You are not alone. Since the start of the Covid-19 pandemic, many French people have preferred to save their income rather than embark on large-scale investment projects, which they consider too risky. However, keeping your savings warm, while inflation continues to climb, is not necessarily the right strategy.
This is why some individuals try to circumvent the economic situation by favoring … different investments.
“Some are afraid, others see investment opportunities. At the moment, I note three main trends”, explains Franck Fargerelle, general secretary at Cheval Blanc Patrimoine.
“All seem to emerge from the specter of inflation”, specifies the expert.
First of all, he notes a renewed interest, over the last ten years, in what he calls thematic funds. “These are investments linked to a societal issue, socially responsible. It’s a nice story to tell an investor, but it’s also a theme that gives meaning to investing. For example, access to water, waste treatment… People are sensitive to these issues which affect them directly”, analyzes Franck Fargerelle.
In the same vein, he observes a trend around hydrogen.
Second type of investment that is popular, according to the specialist: the universe of capital investment, or private equity. “So what stands out from the stock markets ruled by uncertainty, the Covid, the war in Ukraine… People are wondering how to invest their money without being tied to these fluctuations. For the past 5 or 6 years, private equity has been booming”, he specifies.
Finally, according to Franck Fargerelle, investments in foreign currencies are also enjoying some success at the moment. “People want to get out of the euro, they want the Swiss franc, the dollar, and for that they are directed to a life insurance contract in Luxembourg”, explains the specialist.
Among individuals, other unusual investments have been in the news lately. But are they worth the sacrifice of our savings?
Buying a garage or a cellar to rent it out: this is the new investment trend among urban French people. TF1 even devoted a report to it a few weeks ago, arguing that “investing in a cellar is twice as interesting as renting an apartment”. For good reason: buying a cellar in a big city is much less expensive than an apartment (between €900 and €3,000/m² in Paris compared to €10,034 per m² for housing).
But this market, for Franck Fargerelle, is not necessarily accessible to everyone. “It is part of the niches, because it is mainly Parisian, which restricts the investment population. But it is interesting, under certain conditions”, states the expert.
For him :
Also, it should be noted that a bank will probably not lend you money for such a purchase. “You have to buy cash, and take into account notary fees, around 10% on this type of property”, continues Franck Fargerelle.
However, if the conditions are met, the investment is worth it, assumes the expert. “Behind, you have the possibility of a profitability of up to 13%, in real estate, it’s unheard of”, still assures the specialist.
What if you instead put your money… in a forest? This is the idea that is rising among some taxpayers, and especially among young people, concerned about ecology. Le Monde headlined an article from October 29: “Against eco-anxiety, for future generations… They invest in forests, alone or with friends”.
But what does a forest investment actually consist of? “80% of forests belong to institutions, and 15% to individuals, explains Franck Fargerelle”. Often these plots of forest land are managed by corporations. “The management company takes care of everything, turnkey, and resells shares of the forest which will give you a share in the distribution of wood, with a return which is not enormous, between 1% and 1.5 % each year”, specifies the specialist.
But forestry investment is no less interesting, according to the expert. “The second source of revaluation is the value of the forest, which can earn money over time. A hectare at 100 euros today will perhaps sell for 200 euros in 20 years, in particular because of the energy transition”, he assures us.
Another advantage: this investment offers significant tax advantages. “There is a tax reduction on your investment, of 18% for 50,000 euros and a 75% reduction in inheritance tax on the day you die”, notes Franck Fargerelle.
However, the investment has some drawbacks. “You have to keep the product for a long time to experience the benefits. On the tax side, you have to wait at least 5 years for the abatement, and if you are looking for performance, on a return of 3% per year, versus inflation at 9%, you lose money”, specifies the manager in inheritance.