Fight against inflation: chronicle of a battle lost in advance?
Take risks to fight inflation? Savers will have to remember this. Not only will savers not have reached their objective, inflation will remain unbeatable, but moreover their investments will mark negative valuations, pending the return of good weather on the financial markets. Kind of a double full. Investors who are not too risk averse may however find it advantageous to invest part of their capital in risk-exposed funds when an upward trend returns. Because one day, it will be better! But it’s not for now. And it is at this point that it will be necessary to invest in units of account invested in the equity markets to seek returns and not before. In the meantime, among the units of account, SCPI and high-yield bonds will do the job.
Record of payments on units of account
France Assureurs has published this record rate of distribution of payments made on account units. Since the beginning of the year, contributions have reached their highest level since 2010 at 88.4 billion euros, while those in units of account (UA) have never been so high, at 36.1 billion euros. euros. The share of unit-linked contributions has been 41% since the start of the year, compared to 39% for 2021. At the end of August, the valuation of units of account since January 1, 2022, all CUs combined, is -13%. This confirms that exposing yourself to equity market risks in an attempt to fight inflation is definitely a bad idea.
Life insurance / September 2022: storm warning for your units of account?
Overtaken by the events ?
It’s always easy to see the damage after the fact. And to indicate that we should not go down this path. However, what is easy to do for savers who manage their investments themselves is to always respect their risk profile. Balanced does not mean being invested at 70% in units of account with an SSRI of 5 or more! In addition, you have to know how to sort between SCPIs whose SRRI oscillates between 2 and 3 and equity funds, whose SRRI is around 6 or 7.
- Invest regularly : By investing regularly, every month for example, an identical sum on a defined allocation, the saver thus smoothes his cost price for the acquisition of his units of account. This is obviously not an optimal strategy, but it allows savers who do not wish to monitor their investment closely to be less strongly affected by strong fluctuations. The problem being that it plays as well on the sharp declines as on the sharp rises. This strategy only works, in the long term, thanks to the returns provided by the units of account. Otherwise, the saver would ultimately only have an average cost price. Investing regularly, mechanically, without taking into account bullish and bearish trends, in units of account that serve no return (ETF commodities, GOLD, etc.) obviously has no financial relevance.
- Invest for the long term : Remember that you save for the long term, that the latent capital losses at the moment will no longer be in 3 or 4 years. This is the price to pay for having invested at the wrong time, before the decline.
- Piloted management, to hand over to the pros : And if you are not comfortable with your choices, you have to move on to managed management. It is also offered for this. That’s not to say the returns will be higher than if you managed your allocations yourself, but at least you won’t have anything to complain about.
Which CPUs to choose?
In this dark period on the equity markets, SCPIs are obviously sought after by savers. With the highest risk/return ratio of all investments, these real estate supports have all the advantages within life insurance. This is particularly the case for the CORUM LIFE contract. It is important to note that this contract restores 100% of the income of eligible SCPIs, and that the costs are strictly the same as when buying SCPI shares directly, thus cutting off all criticism relating to the holding of SCPI shares. in life insurance. It is therefore an accumulation of unique advantages on the market. This contract only allows the investment of risk-exposed capital (SCPI, bond funds). The part of the risk-free capital to be placed on a life insurance contract allowing to place 100% on the euro fund (there are still some!).
Moreover, when interest rates rise, it is advisable to take an interest in bonds, and in particular high-yield ones. Yields increase, even if the trend is bearish for this market. The higher rates rise, the lower the price of fixed rate bonds. But beware, this does not mean that it is not a good plan. It is obviously necessary to keep its bonds until their maturities. These high-yield bonds, offered in unit-linked form, are high-risk investments, reserved for investors willing to take the risk of capital loss.
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