I’m 23 years old and I’m writing to you today to ask for advice.
My accounts
1. 20k PEA Fortuneo (opened +/- 3 years ago)
6500€ Air Liquide
5600€ MSCI Emerging (PAEEM)
6400€ S&P500 (ESE)
500€ STOXX 600 (ETZ)
600€ Novo Nordisk (NOV) +/- value -1400€…
I’m aware that I have too many positions and that my portfolio is slightly unbalanced.
The purchase of Novo was a big mistake at the time, but I’m now focusing on only 2 positions: Emerging Markets and S&P500.
2. Livret A + Livret jeune full
Emergency fund
3. LDDS full
My idea here is to use it in case of a crash (AI bubble? other crises?)
4. Life insurance
Linxea Avenir (800€)
Linxea Spirit 2 (500€)
2 life insurance policies to establish the opening date.
My investment capacity
I can currently invest approximately 1.5k€ per month where I put 1k on the S&P500 in 2 transactions (to take advantage of the first order without fees) and 500 on Emerging Markets.
My questions
I closed my PEE (Employee Savings Plan) with an amount of 10k€ in stocks and I’m wondering how to invest this amount?
Why did I want to close my PEE?
My PEE was composed of Orange shares, the company where I did my work-study program (sold at 15.6€/share)
So I sold because the stock seems very high to me and especially because of the upcoming presidential elections.
Given my current assets, what should I focus on? Do DCA (for example 500€ per day or 1000€ per week) until I « exhaust » the 10k? Invest everything at once? Strengthen the STOXX 600 that I’ve neglected today? Rebalance my PEA? SCPI (Real Estate Investment Companies) (even though this doesn’t seem relevant to me)?
Finally, more generally, what is your overall opinion or constructive criticism of my current strategy?
« what is your general opinion or constructive criticism of my current strategy? »
In two words:
geographical diversification on top of world is an illusion, everything is connected
Just because EM economies are going to develop (we can think so) doesn’t mean the shares of their companies will increase in value (plenty of reasons for that, but for example the often unfavorable exchange rate that doesn’t allow you to fully benefit from potential gains, or semi-state-owned companies like in India or China that will never do anything on the stock market)
@Equinox
For the time being, I don’t need liquidity and my problem is that I still don’t know if I’m going to stay in France, and if I do stay, I haven’t yet decided where to settle.
Also, given that I’ve had my PEA for 3 years, in 5 years it will be 8 years old, so I don’t know if bonds are really relevant since withdrawing won’t be a problem
@Frederic364
That’s indeed my idea, but the question is how to do it in the most relevant way.
At 23 years old with 10k, you can do a lump sum. For my part, at 53 years old, I did one at the beginning of the year for 13.5k (they’re at 15.5k today). In any case, since you’re doing regular DCA on the side, you continue to benefit from the ups and downs on those contributions.
What to do with the money? Assuming this is very long-term investment, the most logical approach would be to reinvest it in the PEA proportionally to your target allocation, quite simply. Obviously, valid criticisms can be made about your PEA allocation and some comments have already addressed this.
I think a simple lump sum would work very well given the profile. If you’re worried about an imminent crash, you can split the difference by investing 5k now and spreading the next 5k over 5-6 months.
Otherwise, more broadly regarding assets, keeping a full LDDS while waiting for a crash—history shows this is rarely a winning strategy because markets don’t fall often, it’s not easy to invest when everything is red and people are talking about the end of capitalism, and knowing when to get back in isn’t obvious either. And in the meantime, you miss out on a growth period that is sometimes significant. If this is also money for the very long term, you could always put it in an AV (assurance-vie) on more defensive vehicles than stocks (euro funds/short-term bonds/liquid alts), telling yourself you’ll switch to aggressive the day the market drops (some AV contracts even have leveraged ETFs, believe it or not). For a small tactical pocket, the AV isn’t uninteresting. Otherwise, it’s also an opportunity to take the plunge and open a CTO (compte-titres ordinaire).
Your 10K was in stocks on your PEE, so by transferring it to your PEA in stocks you’re not changing your asset allocation at all. It’s almost as if you hadn’t done anything, you’re still at approximately 45% stocks / 55% cash.
You haven’t told us about your short/long term plans so we have no reason to tell you whether this 45/55 allocation is good or not.
@Emi
It is indeed for the very long term. The idea of putting it in a life insurance policy and being able to switch is indeed something I hadn’t thought of, but which I find relevant in my case. Regarding the securities account, I don’t really see its benefit given the fees compared to a PEA and the shares in my portfolio.
@Oliverq
As for my long-term plans, I don’t know them myself…: buy? rent? move abroad (having a securities account would be very relevant at that point)?
In any case, when I need liquidity, selling the shares in my PEA will be more advantageous than in my life insurance policy
Hello Maxence, I think you should spread out your 1000 per month. I think you would benefit from market variations if a correction occurs, but if that’s not the case, your DCA over a year won’t be significantly impacted over a one-year period, and it will give you time to refine your investment strategy.
By the way, you probably want to move, so you should open a CTO (Compte-Titres Ordinaire) with physical indices using ETFs that are much better than those on a PEA (Plan d’Épargne en Actions).
