Obviously, the booklet A is the ideal investment for his precautionary savings (just like the LEP for eligible savers), while investments in SCPIs, structured products and Life Insurance are long-term investments, whose objective is quite different: to build up capital for retirement, to grow one’s savings, to transmit capital, etc. However, with each change in the rate of the livret A, multiple self-proclaimed financial experts can not help but go into delusions of performance comparison, and I admit that this annoys me a bit. Compare the potential return of a financial product at risk of capital loss (SCPI), or life insurance (with exposure in units of account) with the certain and known return of a savings investment , whose capital is guaranteed at all times, simply amounts to misleading savers.
Traditional comparisons when changing the rate of the booklet A
At each of the variations in the rate of the booklet A, like this last increase on August 1 to 2%, plethora of articles flourish on the web, as well as on social networks, in order to know if it is better not to invest in insurance -life or on SCPIs than placing on a booklet A. I will spare you the details of these videos on YouTube where 25-year-old financial experts, these financial influencers, who obviously do not know much about finance, assure you that Livret A is cheesy and only cryptos or IPOs are to be followed, via a few monetized links… This is obviously financial nonsense and lack of advice. You can only compare financial investments of the same nature. The passbook A rate is not comparable to that of SPCIs, nor to that of a real estate return, nor of a structured product, nor even of those in general in life insurance, funds in euros or not. Even less with these alleged returns on financial assets at risk of capital loss. Why ?
The risks, you know?
The returns of financial investments exposed to the same level of risk of capital loss cannot be compared. Exit, therefore, the comparison with SCPIs, risky investments, exit with the comparison of stock market investments or even more volatile financial assets (cryptos, etc.), exit also the comparison with life insurance. A downside, what about euro funds? Exit just as much. The capital guarantee is not the same. Neither is the availability of funds. On the one hand for the booklet A, it is the State which is the guarantor. For the euro funds, it is a guarantee fund which we know that in the event of a major crisis, it will not be up to it. And in any case no comparison is possible, because the rate of return of the euro funds is only known after the match! How can you compare a known return with a return whose level you will not know until the following year of your investment?
Comparing past performance with the current rate of booklet A is nonsense…
You know this little phrase well…”Past performance is not indicative of future performance.“. All the expert apprentices comparing the yield of the Livret A account with any other investment make the same mistake. They compare past yields, SCPIs, euro funds, UC, stock market indices, etc., with the current yield of the Livret A account. Compare past performance with current performance is irrelevant.
Availability of funds
Livret A allows you to leave your precautionary savings available at any time. This is obviously not the case for SCPIs, and contrary to what many savers still claim, not necessarily the case for life insurance. The time to recover funds on a life insurance contract is now much less than in the past (2 days is sometimes enough), but remember a clause allowing insurers to no longer respond positively to redemption requests on life insurance contracts. Thus, in the event of a financial crisis, withdrawing your marbles from a euro fund may well get stuck. Think the board is too black? Everyone has their own opinion. Everyone has their own risk management.
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