What Are the Best Investment Options in 2023 ?

What Are the Best Investment Options in 2023?

When inflation rates are reaching record levels, whether in Europe, the United States, or emerging countries, investing money profitably while controlling risk is more than ever essential to protect and grow your wealth. In this article, you will discover the best investment by category in 2022 for an optimal risk/return ratio.

However, note that the way to invest or place your money depends on several factors: the investment horizon, that is to say, the time he thinks or wishes to be supported; the return target, i.e., the income the investor needs; risk aversion, i.e., the limit at which the investor no longer feels comfortable in his investment; Finally, the choice of investments also depends on the need for cash, i.e., the amount of money the investor needs to meet 6 or 8 months of current expenses.

What Are the Best Investment Options in 2023?

Note also that certain constraints may affect an asset allocation. This is particularly the case for the investor’s situation in terms of taxation. High taxation can lead the investor to reconsider or discredit certain asset classes that would not otherwise have made sense.

If you want to know how to pay less tax, do not hesitate to contact an Agora finance private management wealth manager specializing in taxation.

What Are the Best Investment Options in 2023?

The best real estate investments in 2023

Turnkey rental real estate

First, real estate is a resilient and safe haven asset class in the inflationary environment we are experiencing. Indeed, rents being partly indexed to inflation, we understand that if inflation increases, rents automatically increase.

In addition, to take full advantage of the return/risk ratio offered by real estate, you can invest in turnkey rental real estate. This option provides the advantage of being an acquisition method where a professional handles the entire investment process. Indeed, the investor is accompanied by the definition of his specifications through the search for the property, the search for financing, the management of the work until the handing over of the keys, or even the rental.

Note that it is essential to optimize the taxation of such an investment. To do this, do not hesitate to inquire with a wealth management firm that will help you know how to pay fewer taxes.

Finally, the editorial staff of Agora Finance advises you to turn to investments in “energy sieves.” This consists of buying a property that will see its price discounted because of its energy label.

Here is the chronology relating to the implications of the climate law in terms of sales and rentals of real estate:

The best investment in SCPI SRI

However, if you do not want to invest in real estate directly for fear of hazards and management constraints, the SCPI solution seems the most relevant to meet your expectations;

What is an SCPI?

An SCPI is a Civil Real Estate Investment Company. It collects funds from savers in exchange for shares. These funds allow the SCPI to acquire all real estate types (office buildings, commercial cells, business premises, car parks, warehouses, etc.).

The assets thus constituted will be diversified both geographically and sectorally.

The management company operating this property portfolio is approved and regulated by the Autorité des Marchés Financiers (AMF); it deals in particular with the acquisition, the carrying out of work, the rental, then the collection of rents to pay them back to savers.

In this article, we place particular emphasis on SRI ( Socially Responsible Investment ) SCPIs:

To be an SRI SCPI, an SCPI must prove that it is committed to a policy of improving its investments on the following 3 ESG criteria :

  • Environment: reducing energy consumption to reduce the carbon footprint, water consumption, and waste production.
  •  Social: improve the comfort, health, and well-being of tenants. Easy Access to public transport aids people with reduced mobility, etc.
  •  Governance: improve dialogue with tenants to have a common approach to environmental and social issues.

What is the best SCPI investment in 2023?

The best SRI SCPIs :

– ActivImmo: created in 2019, the SCPI Activimmo aims to be 100% invested in logistics premises. It focuses primarily on the transformation of real estate resulting from e-commerce. At the end of 2021, its capitalization stands at 328 million euros, and its yield at 6.02%.

– Novaxia Neo: this young SCPI, created in 2019, is dedicated to urban transformation, the development of new transport infrastructures with low environmental impact, and the rehabilitation of real estate assets. At the end of 2021, its capitalization was 140 million euros, and its yield was 6.49%.

– Vendôme Régions: in November 2021, the SCPI Vendôme Régions obtained the ISR Immobilier label. It benefits from a good year in 2021, 1,000 new partners, and a comprehensive quarterly collection of €45.7 million. This SCPI continues to grow successfully. At the end of 2021, its capitalization was 350 million euros, and its yield was 5.91%. It is invested in business real estate in the regions for local and diversified savings.

If you want to know more about the best SRI investments, contact our private management advisors!

The best 2023 investment in private equity real estate

Finally, private equity real estate is an investment that is riskier but offers more attractive returns. Indeed, the return objective of real estate Private Equity funds is around 7% to 10% while having a controlled risk due to the underlying asset class, real estate.

Private equity real estate is thus an alternative to traditional real estate investment. Its investment model is based on the potential capital gain, not the return drawn from the rents received.

The principle of investment is to enter the capital of unlisted companies to enable them to finance their real estate projects. It is, therefore, a question here of financing companies that intervene in the real estate field rather than buying a property directly. This can be acquisitions, real estate developments, or property trading transactions.

Given its nature, unlisted investment is intended for the medium or long term. Indeed, it is essential to give companies time to use the capital received and complete their project before the return materializes.

Thus, most investment vehicles block the funds for 5 to 8 years. This can extend to 10 years in specific cases.

This liquidity also has advantages: the invested assets are less volatile outside the turbulence of the financial markets. The funds remain regularly valued 2 to 4 times a year, which allows you to maintain visibility on your investment.

The unlisted investment allows Access to high profitability, despite the associated risk. The most significant players aim for an average return of 7%/year net of all costs. This increased profitability is explained by the risk associated with this type of investment. It can be risky if the financed companies do not keep their promises. The valuation of the securities may fall during the investment period.

On the other hand, investment in the unlisted is not guaranteed in the capital. With the solutions mentioned above in this article, you must be “ready” to bear a capital loss more suddenly than possible.

Funds invested in the real estate sector are found in a specific type of fund: FCPRs (Risk Mutual Investment Funds).

Investment in the unlisted is subject to the tax regime for transferable securities. Optimizing this taxation by housing these investments in tax envelopes is possible.

Like any security, unlisted shares are taxed on dividends and capital gains on disposal:

  • The fixed IR rate of 12.8% plus social security contributions of 17.2% gives an overall rate of 30% (called a flat tax ).
  •  At the income tax scale (with a 40% deduction for dividends, the deduction for the holding period on capital gains when the securities were acquired before 01/01/2018). Social security contributions at 17.2% are also due to bonuses or gross capital gains.

In addition, it is possible to optimize this taxation by holding these shares within tax envelopes such as life insurance or the PEA and PEA-PME.

  • It should also be noted that FPCRs do not give the right to a tax reduction on entry, but some allow exemption from income tax on any capital gains on exit.

However, this is optional and depends on the management house’s choices. Some funds do not offer an exciting benefit to allow more investment freedom. Capital gains are then taxed according to the classic regime.

The best financial investment in 2023

The best life insurance this year

What are the advantages of a better 2023 investment in life insurance?

Secondly, financial investments are an essential pillar of wealth management. Life insurance – notably the preferred investment of the French – is often at the heart of investors’ financial assets. There are several reasons for this: its flexibility, which allows the investor to grow his capital according to his risk profile, diversify as he pleases, take advantage of it at the time of retirement by having the possibility of making a one-off or scheduled redemptions, and finally anticipate transmission at a lower cost in terms of taxation.

The saver/investor can thus choose to invest part of his capital in euro funds (which has the advantage of seeing his money guaranteed).

Contact our private management experts, who can advise you on the best life insurance contracts.

 What are the best funds available in life insurance?

We recommend the advice and support of a wealth manager who can diversify the investments of the life insurance contract with different types of investments. Agora finance experts focus on four types of assets:

  • Real estate funds
  •  Structured products
  •  SRI labeled funds
  •  Thematic funds

What is the best real estate fund investment in life insurance?

Real estate funds are also an attractive risk/return investment for risk-averse investors. The editorial staff of Agora Finance recommends an SRI-labelled fund: SCI Capimmo.

SCI Capimmo is an AIF (Alternative Investment Fund) created in 2007 by the management company Primonial. It is now a leader in real estate savings. SCI Capimmo was voted the best SCI by the Pyramids of Wealth Management in 2021. Most of the assets in its portfolio are located in France and Europe.

Breakdown of assets of SCI Capimmo

Sector breakdown of SCI Capimmo

The best investment in structured products

Structured products are financial instruments in which the return is linked to an underlying asset. The conditions of this investment product are defined beforehand, the maturity of the product, its yield, the presence of a memory effect or not, the early redemption rules, and finally, the level of capital protection.

Structured product objective of 10.5% per year: Stellantis / Société Générale

How does Agora Finance’s best-structured product work?

Agora Finance’s structured products aim for attractive remuneration without requiring significant market increases. They are among the best investments of 2022.

Their performance depends on the evolution of indices representative of major European companies.

We systematically design them over a maximum period of 5 years to optimize the return/risk ratio. We select investment vehicles or underlying that have a strong potential for revaluation. Even in decline, the memory effect offers the advantage of not losing return over the medium term.

We design unique products on the market and offer personalized solutions systematically better than the traditional offers of private banks. The main reasons: are lower structural costs, less margin, transparency of our performance-related remuneration, and robust risk management.

Agora finance experts recently launched a product exclusively dedicated to their clients. The underlying are made up of two stocks: Stellantis and Société Générale.

What are the characteristics of Agora Finance’s latest structured product?

These structured products suit a financial asset diversification strategy or corporate cash investment issues.

The best SRI-labelled investment of 2023

To diversify your assets and give meaning to your savings, you can opt for socially responsible investment ( SRI ). But what is SRI? Socially Responsible Investment is an investment that considers extra-financial criteria (ESG: Environment, Social, Governance) to reconcile economic performance and social responsibility.

Our wealth management firm is particularly committed to implementing socially responsible investment strategies for our clients. Indeed, faced with the many savings products available on the market, we realize that investors need help to make an informed choice. Opting for socially responsible investment is now a popular solution for individuals to give meaning to their savings while maintaining returns equal to or even higher than the market.

The Echiquier Positive Impact fund

Echiquier Positive Impact Europe is an SRI-certified fund invested in European companies whose activity provides solutions to sustainable development objectives.

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The best thematic investment in 2022

Finally, the editorial teams of Agora Finance present investments in thematic funds. These funds generally combine sustainability and disruptive technologies. We have chosen to present to you, particularly the Échiquier Artificial Intelligence fund from LFDE (La Financière De l’Échiquier).

Échiquier Artificial Intelligence is a SICAV sub-fund invested in major international stocks that benefit from or develop artificial intelligence.

After this sharp fall, investing in this fund may be an opportunity and be one of the best investments for 2022.*

  • This is not investment advice.

To support you in your financial investments, you can contact the experts at our wealth management firm in Paris.

Alternative Investment

The third part will discuss an attractive alternative investment: Private Equity.

What is the best private equity investment?

Private Equity is a reasonably tricky asset class but more relevant than ever in these times of uncertainty in the financial markets. We mentioned earlier in this article that this type of alternative investment is purely a real estate part. It is one of the best investments for 2022.

To give a more general definition, Private Equity (unlisted investment) refers to all investment vehicles not subject to fluctuations in the financial markets. In concrete terms, it is a class of assets in its own right. It involves investing in tangible economy assets (companies, hotels, real estate, infrastructure, etc.) not listed on the stock exchange.

It is a means of diversifying one’s assets and, therefore, seeking a potential return higher than conventional solutions.

Within this asset class, we find Private Equity, also called Private Equity, which consists of taking direct participation in companies’ capital, and Private Debt, which aims to finance companies through the subscription of obligations.

It is now possible to invest in companies of any maturity, from start-ups to family businesses, in all sectors of activity.

The investor can finance the launch of start-ups, which presents a high risk, and the development of more mature companies, which constitutes a lower risk.

When we talk about Private Equity, we identify two main types of funds:

  • Mutual Funds for Risk Investments (FCPR) and Professional Capital Investment Funds (FPCI): invested in securities of companies not listed on the stock market, in corporate bonds. We find here the funds invested in the real estate sector.
  •  Mutual Funds for Investment in Innovation (FCPI) and Local Investment Funds (FIP): invested in securities of innovative companies not listed on the stock exchange, up to a minimum of 60%.

Why invest in Private Equity?

A significant reason is that you actively promote and create innovative companies as investors, particularly in the new technologies sector.

The objective is to participate in developing companies to achieve added value in fine after 5 to 8 years in general. It is, therefore, an essential cog in the financing chain of a company.

In the same way, as for private equity real estate, the traditional unlisted investment is envisaged in the medium/long term. Indeed, it is essential to give companies time to use the capital received and complete their project before the return materializes. The targeted net return is around 7% to 10%.

What taxation for investments in Private Equity?

The applicable taxation is identical to that of Private Equity real estate, which you will find earlier in this article.

However, while FCPRs and FCPIs do not give the right to a tax reduction on entry, FCPIs and FIPs provide the right to a tax reduction of 25% of the amount invested (30% for overseas FIPs) in the event of 100% investment.

The reduction may be lower if the management house invests less than 100% of the funds collected. She often keeps 10% of her cash. The drop is then 22.5% or 27%.

The ceiling considered is €12,000 for a single person and €24,000 for a couple, i.e., a maximum tax reduction of €6,000.

Why invest in SRI investments?

To finance the ecological transition, reconciling performance and a sense of savings seems more relevant than ever today. You will be able to give meaning to your investments without compromising returns.

What are the safest investments in 2022?

The safest investments are real estate funds. In this article, we have presented SCI Capimmo to you.

Which investments offer the best returns over the long term?

Over the long term, the editorial staff of Agora Finance advises you on riskier investments that offer a better return and allow you to smooth out the risk over time.

How to boost the return on your investments?

To boost your real estate investments, you can favor structured.

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