David Simon is a member of the management committee of the AG2R La Mondiale group, responsible for finance, investments and risks.
Savers continue to massively invest their money in risk-free products, such as Livret A, the outstanding amount of which has reached a historic record. Is there nothing better to do?
France finds itself in a particular situation: short-term interest rates (3.90%) are higher than long-term ones (2.90% for the OAT ten years) for a year. Investors are therefore encouraged to place their savings in risk-free products, such as savings accounts and term accounts, rather than long-term. Fortunately, this situation should end in a few months. Indeed, the European Central Bank should reduce its key rates, currently at 4%, to reach 3% by the end of the year and 2.25% at the end of 2025, according to our projections. Safe investments will therefore become less attractive than they were in recent months.
Which investments should you turn to in this case?
The year 2024 should mark the return of the euro fund in life insurance: it combines capital guarantee, liquidity and return. The return to normal on the yield curve, that is to say long-term yields higher than those in the short term, will be favorable to it. Insurance companies are more comfortable in this situation, because euro funds are mainly invested in long-term bonds. Furthermore, these financial products, whose asset management is diversified, are also invested in stocks and real estate, a sector in difficulty due to falling valuations. However, we believe that the year 2024 could bring purchasing opportunities, particularly in office real estate. Indeed, the second half could offer attractive conditions if certain institutional investors were forced to sell quickly to meet the liquidity needs of their clients.
The CAC 40 index of the Paris Stock Exchange gained 10% over one year to 7,900 points, a historic level. Is it still time to invest in stocks?
We are cautious today because valuations are high. This results in particular in a clipping strategy for our fund in euros, invested in equities for 8% to 10%: we take profits by selling part of our lines as the markets rise, to prevent the weight of stocks in our allocation from becoming too large, while remaining exposed in the long term to this performance driver.