Invest in stocks | Paper Jam News

While key bank rates rose 25 basis points in July (prior to a second increase in September announced by the European Central Bank), historically they have never stayed so low for so long. Placing money in an interest-bearing savings account is no longer truly profitable, and most people choose to protect their capital or even increase their wealth in other ways. Real estate, the stock market, life insurance, art, collectible watches, or even the metaverse… investments come in many forms and can be surprising. Every Tuesday all summer, Paperjam gives you keys.

Investing in stocks is one way to place money in the financial markets and generate returns by choosing the level of risk one is willing to take. Of course, the return on this asset class is proportional to the degree of exposure to market volatility. Investing in shares means buying shares of companies listed on the stock exchange, in other words, acquiring ownership interests in companies. Each share represents a share of the capital of the company. By issuing shares, a company sells shares of its capital to investors to raise funds to finance its growth. If this is positive, shareholders are rewarded with dividends paid annually or quarterly. This gain is proportional to the growth and size of their investment. This may allow them to receive capital gains, hence more money in the long run than was invested at the start. Stocks can also be subject to market fluctuations and not generate short-term profits. This is why this asset class is not a stable or guaranteed source of income, but an investment. Due to its volatility, it varies depending on the company’s performance and dividend distribution policy. Therefore, it is important to be well informed about asset grabs, 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 Accumulation Plan) through their bank, brokerage firm, or online investment organization. PEA allows you to invest directly in selected stocks. This type of savings offers the opportunity to capitalize in the medium term (5 to 10 years) and remains profitable, provided you have high risk tolerance and diversify your portfolio well. Currently, most banks offer themed equity funds that match their commitments as well as economic issues identified by each bank as current or future (warfare, technology, emerging markets, etc.).

Turning to UCIs, collective investment enterprises (funds, sikavs, etc.), a non-professional investor receives regulated management and diversification of asset portfolios, which makes it possible to mitigate the consequences of possible crises.

Retail banks in Luxembourg also offer a self-investment service through their mobile app (Self Invest at BGL BNP Paribas, R-Gestion at Raiffeisen, etc.). Finally, for those who are already familiar with 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 with constant inflation in Europe and the aftermath of the war in Ukraine, stocks are not necessarily cheap, and their valuation multiples are very high. But for an investor who wants to maintain their purchasing power in the medium to long term, they are still the best way to go, observers say.