Investor competition

In the context of the investor competition, which started on 15 February and will end on Friday, May 13, we regularly present a trading product. Today: CFD

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CFD is an acronym for contract for difference. The product is born in the nineties in Britain, to avoid a tax. financesplus.net It is a contract between two parties: investor-a person who makes an offer, the stock exchange broker. The two parties undertake in a speculation on the direction that an underlying value stream will take. You can sign a contract with a long position (the course will increase) or a short position (the course will drop). The underlying value may be an action, but also a currency, stock index, a commodity or an interest rate.

A CFD is a derivative because the value is derived from the value of another active. The term difference represents the difference in value that the assets between the time where you start the bet and when you turn it off. If you win the bet that the price has moved in the right direction, the broker must pay you gain. If you have failed, in this case, you must pay the loss to your broker and you see the balance of your account decrease.

Bet with a leverage effect

The main feature of a CFD is its leverage effect. You can, with a limited bet, win the increase or decrease of total value. Imagine that you anticipate an increase in the stock of Bekaert. Your CFD broker etoro displays 27.10 and 27.15 euros as courses for sale and courses to the purchase, the price at which he wants to conclude a contract with a short position and a long position. As you go higher, you take a long position. You place a bet on 1000 shares. You can freely determine this quantity. If you bought the shares les options binaires, it would cost you 1000 x 27.15 euros = 27.150 euros (excluding postage). If you purchase a CFD contract with a long position, you work in this case by a margin of position and you must book only a fraction of this amount for your bet.

The type of lever with which you can work depends on the broker. Some allow a margin of 5%, others – such as Lynx – allow 12.5%. If the minimum margin is 5%, you can subscribe this order betting 5% of 27.150 euros, or 1.357,5 euros. This amount is blocked on your account. It is also the maximum amount that you can lose. As soon as the course down 5%, you lose your bet. If the action increases by 10%, you earn in this case 2,715 euros, which represents a gain of 200%.

High risk

The great advantage of this product is that you can adopt significant positions in the market with limited means. You can very easily speculate on a move at the drop of an asset, which, in Exchange, is almost exclusively to the scope of institutional investors. CFDs also offer the ability to play very short on the ball. As you adopt positions on almost all of the underlying values, the financial world as a whole becomes your playground. You can taste the world of professionals.

But there are also many disadvantages to CFD, which are high risk products. If prices vary greatly, you very quickly lose the entirety of your bet. You are obliged to follow almost constantly open positions, certainly those with a significant leverage effect. There’s also a counterparty risk. The broker may exaggerate his hand and to no longer be able to meet its payment obligations.

This is not a sinecure to be beneficial long-term with the CFDs. single a trader in ten it would succeed. It is very difficult to consistently beat the market in the short term. More than the margins are narrow – and at least you wager your own money – more than it becomes difficult. Because of the high risk, CFD are not within the reach of the investor ‘good father’. The likelihood is great that you may lose your money.

Liquid shares

In Britain, the birthplace of CFD, there are dozens of brokers. Each market maker is determines its offer and its conditions as seems it, as the leverage effect and costs. In Britain, these products focus primarily on British and U.S. equities, as well as on major European values. For a Belgian investor, this is not so interesting. It must also make a transfer of money to a British account number.

In our country, there is that Lynx and Keytrade Pro (only accessible to specialized investors Keytrade Bank platform) which offer CFDs, so the least known WH Selfinvest, and again, only on the most liquid Belgian shares. The Dutch broker DeGiro works already for some time to an offer of CFDs on the Belgian actions, such as alternative to shares listed on Euronext Brussels. The objective is to manufacture of CFDs on been

In our country, there is that Lynx and Keytrade Pro (only accessible to specialized investors Keytrade Bank platform) which offer CFDs, so the least known WH Selfinvest, and again, only on the most liquid Belgian shares. The Dutch broker DeGiro works already for some time to an offer of CFDs on the Belgian actions, such as alternative to shares listed on Euronext Brussels. The objective is to manufacture of CFDs over which he has no leverage. If you want to buy 1000 shares of Bekaert, you should in this case have the total amount on your account. But development takes longer than expected. It seems not so easy to put everything in place.

Costs and taxation

Subscribe to a CFD contract is not free. The broker charges a commission per transaction, which can reach up to 0.10 or 0.20%. On a CFD, it has no tax on the stock or tax on speculation, because the product is not listed on the stock exchange. The broker shows the course and endorsed the paris. It is y no other intermediary involved.

The introduction of the tax on speculation has greatly promoted the popularity of CFD. But barter actions for CFD to avoid this tax is not a good idea. These are two totally different products.

Brussels Stock Exchange

The Brussels Stock Exchange, there is a lot of Belgian family holdings. Is it a good idea to invest in these? Notice of Roland Van der Elst, Professor Emeritus and specialist in placement.

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Ackermans & van Haaren, Brederode, Compagnie du Bois Sauvage, GBL, GIMV and Sofina: each of these family companies invests in diversifying his money in several companies. According to Emeritus Professor Roland Van der Elst, they have their place in the portfolio of all saver and investor.

“By investing in a holding company such as Sofina, your capital is highly diversified”, he said. “In addition, you get an additional risk international diversification, because this type of companies often also invests in industries operating internationally or has interests abroad. It is also the case for Brederode, for example.”

The family as a bon père de famille

The holdings are led by important Belgian families. SOFINA is the Boël family investment vehicle, while Compagnie du Bois Sauvage is in the hands of the Padmini clan. “They have invested their own money in these holdings, and therefore take particular care”, argues Van der Elst. “These are long-term investors who avoid speculative risks.”

“Members of the family often sit in the governing bodies of principal companies in which their holding invests. So, these are insiders who are therefore able to very adequately assess the risks of their investments and to track them. In addition, they are also closely involved in decisions regarding new investments.”

When one enters a holding company, can often do, according to Van der Elst, boasting a significant reduction on the intrinsic value. “If you buy a share of EUR 100, it’s worth in this case probably 110, 120, 130, or even 140 euros. Entrance fees and management costs are also much lower than those of shares and investment fund also diversified Fund.”

What yields?

The performance of a holding is composed of an annual dividend and the evolution of the distribution. “Do not focus too much on the increases because they are a function of the stock market climate”, advises Van der Elst. “Long-term growth portfolio worth is anyway important, but in the short term, you must especially pay attention to the dividend. Certainly if it increases annually.”

“At GIMV, the net dividend yield amounts to approximately 3.7%. But: more than it is distributed, at least the money can be reinvested. At Ackermans & van Haaeren, a large proportion of the benefits réafflue to the society. The performance of the net dividend by almost 1.5% lies still always much higher than the return on savings and quality obligations.” For the other holdings, yields vary between 1.7% and 3%.

As long as the distribution of annual dividend at least offers protection against inflation, you are in the right, according to Roland Van der Elst. “But more importantly, it is to let you navigate through the composition of the portfolio and investment strategy at your choice”, he concludes. “Web sites and annual reports of the holdings contain a wealth of information.”

When it comes to real estate, you already imagine your future home, an apartment with a terrace? A loft of architect, a House on the edge of the water? Or maybe do you plan to buy an apartment to rent it? Do you know that there are many ways to invest in real estate and especially, there is a way that you may never thought: real estate in your life insurance. With an estimated average yield around 4.80% in 2015, the SCPI are a solution of diversification for the heritage of the French.
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First, you benefit from the fiscal envelope of life insurance.

Buy stone paper (REITs and real estate funds) in life insurance allows to swap income and movable gains taxation of life assurance, taxation significantly less punitive. You should know that, according to the contract, the dividends are either directly reinvested, either placed on the euro Fund. Another interest, is that you can arbitrate within the envelope ‘life insurance’ without taxation further since money doesn’t come out of the contract.

In addition, life insurance has the advantage to offer a particularly useful framework for estates. A reminder, in case of death of the Subscriber, the taxation of life insurance allows to assign the placed amounts to the beneficiaries of his choice with rights of succession on heavily discounted investments, or even zero. Knowing that the shelf life recommended solutions in rock paper is 8 years minimum, this specificity is especially attractive.
Furthermore, the life insurance envelope brings additional liquidity in the real estate funds and REITs through the Insurance Code that allows policyholders to recover, within a maximum period of two months, the commuted value of the contract.

Finally and above all

Finally and above all, the stone paper within life insurance allows to make diversification to what remains privileged support for the french with an outstanding over 1500 mds € end of 2015. Also, why not think about introducing real estate offices within your life insurance.
The most important OPCI market is Opcimmo, number 1 in terms of collection and stock (source IEIF – December 2015). Opcimmo is a savings solution that mixes investment in real estate business in France and Europe and investment in financial products. This Fund shows a performance of 4.62% in 2015, even though past performance are without prejudice to future performance, they can evolve upward and downward according to the situation of the real estate and financial markets.

If you are looking for a solution yet “more properties”, Edissimmo and Rivoli future heritage are two REITs that are part of the top 5 of the largest REIT’s offices in France in terms of size. Edissimmo, a REIT’s offices which located in diversifying its difference, offers a payout ratio on market value of 5.01% on average to 2015, although past performance are without prejudice to future performance. We also offer to invest in REITs Rivoli future heritage, which enjoys a Parisian DNA (more than 50% of the real estate assets of the REIT are on Paris intramural) and who won better living money 2015 as best REIT’s offices.

These real estate savings products guarantee revenues, performance, nor the capital. As a Subscriber, as part of its life insurance contract, the customer may recover the amount of the redemption within a period of 2 months. Check with your advisor, it will tell you which product may correspond to your profile.

Management: Amundi real estate, 91-93 boulevard Pasteur 75015 Paris – France, Société anonyme with a capital of 15 666 374 euros – RCS Paris 315 429 837, portfolio management company approved by the AMF – n ° GP 07000033. It is recalled that past performance are without prejudice to future performance. The SCPI are investments long term with a recommended length of shelf life of 8 years. Past performance are without prejudice to future performance.

Capital and performance are not guaranteed and depends on the situation of the real estate rental market, the economic situation, the State of the real estate and financial markets and supported loads. The amount recovered upon redemption may be lower than that invested in the event of a decline in the value of assets, in particular the market real estate as well as financial markets, over the life of your investment. Amundi real estate management in return for an annual management fee. This financial product is not intended to be sold in the United States or to US Persons. Prior to any subscription, the following documents must be submitted: Backgrounder, the statutes, the latest quarterly bulletin and the last annual report about the REIT and the OPCI: the Document of Information key to the investor and the prospectus.

Rental investment in France

Rental investment in France is a taken investment from French expatriates. Be it for retirement or simply to develop a heritage and passive income, more than one expatriate on two is ready to leap. If real estate is an excellent investment support, rest to choose the city and the type of project, whether in new or old.
Mickaël Zonta interview, president of company 2 M Council – investment – rental .com which is involved in operations in Paris, in the Paris suburbs and in Toulouse.

Why invest in real estate in 2016 and choose which market?

Real estate in France is evolving unevenly according to cities. The resumption of the volume of transactions is notable, and we are seeing an uptick in Paris (+ 0.7%). Province downward decreases and the trend tends to be reversed.
Borrowing rates that are historically low in this early 2016 are a unique opportunity to engage. Some of our clients travel with rates lower than 1.50% over 15 years. This was not imaginable a few months ago.
Concerning the market to remember, we find that the expatriate French in general choose the city of Paris. Paris is a reassuring city. Firstly because it is a capital in which the labour market is dynamic, which ensures application rental constant in duration.
Then because that high demand and lack of housing allow a high liquidity of assets upon resale. Parisian real estate has thus a side “safe haven.”
And the province?
Some provincial cities attract more than others. Thus, Toulouse is more dynamic than Saint Etienne for example. Investors who choose province cities generally do more personal criteria. They invest in cities they know well and where they grew up.
In the provinces the bargains are also possible. The most important is to stay focused on three points: the rental yield of the operation, the strength of the rental request and liquidity in the event of resale.
I details the elements to be taken into account and gives advice in our ‘Expat Investor’s Guide’ to download for free here.

More than 50% of our investor clients are expatriates.

Precisely, what service do you offer to expatriates who wish to invest in real estate?
We assist people wanting to invest in real estate in their projects from A to Z. concretely, we manage the following steps on behalf of our investor clients: helps funding, hunting property, optimization of the plan, followed by works, furniture, rental and rental management. We are working on the cities of Paris and Toulouse.

Our delivery is therefore key in hand. It allows people expatriate from the best rental yields of the Parisian market while being remote. Here is the type of operation and the testimony of a client expatriate in Bogota.

Our mastery of the market (Editor’s Note: company 2 M Council manages more than 200 properties in Paris and accompanied by investors since 2011) and of each of the stages of the project allows you to obtain a return much higher than the market average, and often double. And without no effort since we manage everything for you.
The financing of real estate projects when expatriate is a sensitive issue?
The funding, which is the first step in any real estate project, is trickier for expats. Traditional banks are not accustomed to the records of expatriates and prefer the classic folders of the French residents. We are working in exclusive partnership with a specialist broker of the question of the financing of the expatriates. This service has been added in 2015 at the request of our expatriate investors who wanted to have a package turnkey integrating funding.
Currently the credit rates are lower history. This is an excellent opportunity to engage.

The financing of real estate projects when expatriate is a sensitive issue?
Currently the credit rates are lower history. This is an excellent opportunity to engage.

Michael Burry

Michael Burry, the manager who has inspired the best seller and Oscar-winning film The Big Short, has launched a new Fund with bets for the least surprising.

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Return to grace of the banks

Having made a fortune by betting against the subprime, Michael Burry has closed his hedge fund Scion Capital in 2008. After a few years dedicated to the management of its (substantial) personal investments, he founded Scion Asset Management. According to regulatory documents, this hedge fund held a series of stakes in major banks US like Bank of America, Citigroup, Bank of New York or PNC Financial end of 2015. Surprising in the light of its comments, Michael Blurry judging that the “largest became even larger”, that the financial system remains subject to terrible tensions due to the policy of the central banks. The investor evokes however no immediate deterioration and no doubt attracted by the relatively low valuation of banks, Bank of America with a ratio course benefits from less than 10 to more than 17 for the U.S. expanded index S & P 500.

Real estate and hospitals

Michael Burry also relies heavily on residential real estate. It has thus invested in a young mortgage crowdfunding platform and the main individual position of Scion Asset Management end of 2015 was thus NexPoint Residential Trust offering a 7% dividend yield. The segment regulated (and therefore relatively protected) operation of hospitals is represented by two leaders in the United States: Community Health and HCA. Finally, technologies (all aspects) are also very much present in the hedge fund portfolio: Apple, First Solar and Theravance Biopharma.

Invest indirectly in water

There is however a great absent in Scion Asset Management Portfolio: water which it however comes at the end of the film and Michael Burry conceded follow for more than 15 years. Faced with the difficulties of actually investing in water (as raw), Guru has is slammed shut on food (which requires large amounts of water) and notably acquired agricultural land.