Real estate? The stock market? Life insurance funds in euros? Booklet A? The Real Estate and Land Savings Institute (IEIF) has unveiled its annual study which attempts to compare the past performance of major investment families. Always a perilous exercise but nonetheless very instructive.
What is the best long-term investment? For the next 40 years, no one can guess it in the coffee grounds! On the other hand, a glance in the rearview mirror is always instructive. Result: a saver who has invested his money over the last 40 years in French shares has made a better investment than in real estate or the Livret A, according to a study published Thursday by the Institute of Real Estate and Land Savings (IEIF ), a study center which therefore assumes its real estate prism.
What was the best investment over the last 40 years?
Between 1983 and 2023, money invested in listed companies in France returned an average of 12.4% per year, taking into account the reinvestment of dividends paid, according to the annual IEIF study. It took as a reference the CAC All Tradable index, which includes, in 2024, the 203 largest companies listed in France, including those in the CAC 40.
For an investment made in 1983, invest in the stock market, more precisely in listed companies in Francewas therefore the best investment ahead of investment in housing in Paris (10.4% per year), other real estate investments such as SCPIs (7.9%), life insurance (6.5%), French government bonds (4.1%) or the livret A (3.5% on average over the period from 1983 to 2023).
To know: performances are calculated excluding management fees, according to the methodology of the study, but an investment in regulated savings (Livret A, or the LEP 5% for example currently) does not involve any management fees. This methodological choice indirectly serves cost-free products in this analysis.
Savings: should we trust the internal rate of return?
Since 2021-2022, we have been in a transition period with the return of inflation to higher levels
The financial context of these 40 years is marked by an environment of falling inflation which brought very low interest rates and with economic growth, a period favorable to stocks, explains to AFP Stphanie Galigue, general director delegate in charge of IEIF studies But since 2021-2022, we have been in a transition period with the return of inflation to higher levels, she underlines.
What was the best investment over the last 30 years?
The prize list is different depending on the given period: over 30 years, between 1993 and 2023, investing in real estate in France (9.3%) is more profitable than stocks (7.7%), or Paris housing (7.4%). Over the last 20 years, real estate companies have benefited from the creation of the SIIC status (listed real estate investment companies) in 2003, an advantageous tax regime which exempts from corporate tax provided that the entirety of the profits derived from the rental and the transfer of buildings is paid to the shareholders. In addition, real estate companies mainly exposed to trade also benefited from the strong appreciation of values during the 2000 decade.
What was the best investment over the last 15 years?
But stocks regain supremacy over 15 years, between 2008 and 2023 (9.9%), far ahead of these two categories (5.2% and 5.1% respectively).
In recent years, the financial performance of real estate has continued to slow down to the point of being negative over 5 years for certain categories such as real estate, a symbol of the difficulties in commercial real estate. The logistics sector, which has benefited greatly from the pandemic, stands out by having a return on investment of more than 15% per year between 2018 and 2023, according to the study.
The expression “don’t put all your eggs in one basket” is often repeated, but diversification is a necessary macroeconomic reality for your investments.
The expression “don’t put all your eggs in one basket” is often repeated, but diversification is a necessary macroeconomic reality for your investments, emphasizes Stphanie Galigue. The ultimate illustration that this study, however instructive it may be, cannot enable us to read the future. In The worldthe IEIF slips in additional information: bitcoin, if it had appeared in the IEIF ranking, would have posted an annualized return of… 63%, underlines the daily based on the IEIF’s estimates .
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