Stock market: 10 golden rules for good investing in the current situation – Le Revenu

Number of rows. We recommend ten to twenty equally balanced lines. Below that, concentration is too strong and risk taking is too high. At the top, tracking proves difficult and performance is too diluted.

Invest gradually. Placing a large amount in a stock or fund at once can be devastating in the event of a sudden market downturn. Therefore, it is more appropriate to invest gradually, ideally the same amount every month. When markets are expensive, you buy few securities; when they are cheap, you buy more. Ultimately, you will optimize your cost prices.

Diversification. This is one of the key criteria for sustainable performance. Your portfolio must be highly diversified both geographically and by industry. Invest in uncorrelated assets, i.e. securities or funds that do not perform well or poorly over the same periods.

Financial support. Income it directly favors holding and managing a portfolio of securities. If you don’t have the time or desire to choose the stocks you want to invest in, choose funds or trackers (index funds traded on the stock exchange) selected by experts from the editorial team.

Costs. Reducing abuse charges is a priority. Without special precautions, maintaining a securities account can cost up to 3% per year in brokerage fees, custody fees, administration fees and other arbitrage commissions. According to the advice Incomeyou can go below 1% or 2% additional earnings per year!

Rotation. Income he advises the values ​​of a “good family man” in a patrimonial and non-speculative approach to stock market management. The securities we invest in, often high-growth stocks, are intended to remain in the portfolio for several months or even several years. Low portfolio turnover helps control brokerage fees and optimize profits over time.

Taxation. Tax-free after five years of holding (only Social Security contributions are payable at 17.2% on profits earned from January 1, 2018), the Equity Savings Plan (PEA) remains the best envelope for investing in the stock market. A couple can thus invest €450,000 in shares tax-free (with two SME PEAs).

Capitalization. Small, recently developed companies show on average a flatter performance in the stock market than the performance of large groups. But they are also more risky. We recommend investing 10 to 20% of the portfolio in companies with a capitalization of less than five billion euros, ensuring a balance between micro (capitalization less than 500 million), small (between 500 and 1 billion) and medium (between 1 and 5 billion) large letters.

Liquidity. Keep at least 5% cash at all times to protect yourself in turbulent times and seize the opportunities that are sure to arise.

Green and responsible management. The stars of tomorrow’s stock market will inevitably be green and socially responsible stocks. In addition to financial criteria (net income, turnover, debt, valuation level, etc.), consider the environmental, social and governance characteristics of your investments.

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