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What Are The Advantages Of Etfs? Transparency, security, risk diversification – ETFs offer several advantages over other forms of investment. We present the most important.

Whether you compare them with actively managed mutual funds or with certificates – investing money with the help of exchange-traded funds (ETFs) offers private investors some remarkable advantages.

1. Low cost

The most significant advantage of ETFs over actively managed mutual funds is also the most important: ETFs cost less. The management fees for actively managed equity funds are usually 1.5 to 2 per cent of the fund’s assets. The prices for ETFs, on the other hand, are generally between 0 and 0.8 per cent of the fund’s assets.

In addition: for many actively managed funds, banks require investors to pay an initial charge. This is due when the fund is purchased and can amount to five per cent of the investment amount or more. With only a couple of exceptions, there are no such sales charges for ETFs. This is also different from conventional, non-exchange-traded index funds: When buying ETFs, only the usual transaction costs on the stock exchange are due. With a cheap custodian bank, these are often less than EUR 10 per order.

Another advantage: actively managed funds are always buying and selling securities. And like other investors, the fund companies have to pay stock exchange fees. This also reduces the returns for investors – in addition to the fees. ETFs, on the other hand, only passively track an index and therefore trade in securities much less often.

The low costs have a direct effect on the wallet of investors: Only a few actively managed investment funds develop better in the long term than the cheap ETFs. For example, the financial economist Mark Carhart examined 1,892 actively managed investment funds for a long-term study. His result: Over the 35 years from 1961 to 1995, 94 per cent of all actively managed funds performed worse than their benchmark index – because they were unable to offset their high-cost burden with an excellent selection of stocks.

In other words: The fact that actively managed funds can generate above-average returns for investors is only an apparent advantage. Most funds cannot keep this promise.

2. Liquidity

ETFs sell faster than traditional mutual funds – so they can be turned into cash more efficiently. The reason behind that is, ETFs are traded on the stock exchange – constantly. Conventional investment funds, on the other hand, are usually returned to the fund company when they are sold. It can often take a couple of days for the sales proceeds to be credited to your account.

3. Security

Security with ETFs – that doesn’t mean that there are no price fluctuations. But it says: ETFs enjoy the legal status of a special fund just like conventional investment funds. That means: Your shares are kept separate from the assets of the fund company. And if a fund company should ever go bankrupt, your ETF shares are not affected. This is different, for example, with index certificates or so-called ETCs (Exchange Traded Commodities), which track the performance of commodities. These are legally bonds issued by the issuer (issuer) – and therefore not protected in the event of bankruptcy.

4. Transparency

As a rule, investors do not know which securities are contained in an investment fund on a particular day – the fund companies usually only publish this information on a specific date and with some delay. The performance and the underlying securities of a particular stock market index, on the other hand, can be easily understood – by looking at the daily newspaper or an Internet portal.

5. Risk diversification

Actively managed funds are also legally obliged to reduce the investment risk by investing in a relatively large number of different securities. With ETFs, however, the risk diversification is even greater. An ETF on the currency 50 shows the development of all 50 stocks contained, an ETF on the American S&P 500 index even indicates the growth of 500 stocks. And whoever buys an MSCI World ETF even gets the performance of more than 1,500 stocks from all over the world.

Compared to individual stocks, ETFs do even better in terms of risk diversification. If you want to spread your risk appropriately by buying individual stocks, you need at least 50 different values ​​from different regions and industries. Without a lot of money (and knowledge) this is hardly feasible. ETFs offer a simple and inexpensive alternative.

6. Even for small fortunes

Due to the wide spread of risk, ETFs are ideal for smaller assets. If you want, you can build a complete portfolio from just three ETFs – and thus cover the bond asset class as well as the stock markets around the world.

The answer to this question will determine which system makes the most sense.

What Is My Investment Goal? Many consumers want to build up reserves in order not to have to pay bills, for example for a car repair, with an expensive overdraft. A call money account is ideal for such a reserve. When it comes to resources that can be invested for a few months or years (for example, repairs to your own house, saving for the children’s studies), fixed-term deposits and savings bonds come into question.

Comparison Of Interest Rates Can Be Worthwhile

Even if many online interest rate comparisons are only brokerage platforms that usually do not cover the entire market, they are still helpful in finding attractive offers. Many good offers are limited in time (new customer offers) or they are limited in amount. Some banks with extraordinarily high-interest rates are located abroad and are therefore not subject to domestic deposit insurance. If safety is the top priority, these offers are discouraged.

If you save for your own home, you usually don’t want your assets to be exposed to more significant risks. Then only interest investments with domestic deposit insurance are a good option. Investments with more risk, such as equity funds, promise a higher return, and that may seem tempting. But what if the risk occurs? Is it then still possible to buy real estate?

A new home loan and savings contract can be worthwhile if interest rates rise sharply. Anyone considering this should also ask themselves whether they can still bear the rest of the financing even if interest rates rise because a home loan and savings contract is usually only a small part of a financing package due to its high repayment rate and the minimum savings.

Saving for old age, high-yield forms of investment are particularly interesting because they enable the highest pensions in the long term. However, you have to dose the mix of opportunities and risks individually.

When Too Much Risk Becomes Critical

The key is to avoid bad risks and instead take good risks.

Investors do not always have good experiences with risk. Anyone who has invested money in shares in Telekom or the Neuer Markt, for example, will usually not be able to gain anything positive from the stock exchanges. But the risk is not all bad, because threats are always associated with opportunities. The key is to avoid bad risks and instead take good risks. Reasonable risks, on the other hand, are those that only affect the development of the entire stock market, measured against a stock index.

Before you invest money in the stock market, there is a central question that only you can answer on your own: Do you want to take more risk for more opportunities and if so, where is your pain threshold? How much (or percentage of the investment amount) could you forego in the worst case? Many investors find it challenging to find an answer to this. Take enough time for it. Don’t just look at the risks, weigh the opportunities too. Your gut feeling is important, because if you don’t feel well as soon as the stock market crashes again – and it does all the time – you should stay away from it or limit the share of stocks.

Real Estate Funds. Shares in closed real estate funds are sold like hotcakes. Spectacular bankruptcies and the conviction of individual initiators for capital investment fraud show, however, that you as an investor can burn your fingers violently with these products, which are usually offered as risk-free (“real estate is always safe”).

What is a closed real estate fund?

Real estate funds are offered in two different forms: as “open” and “closed” real estate funds. The difference is significant. In the case of closed funds, financiers/investors are advertised for a specific investment object. When the required amount has been collected, the fund will be closed, and the implementation of the project can begin. In the case of a closed real estate fund, this is, for example, the acquisition or construction of a property and the subsequent rental. The later sale of the property can also be planned. Investors take a considerable risk with such an investment because success depends on the development of a particular real estate project. Open real estate funds, on the other hand, function like equity funds. Many investors throw small amounts together. The fund management uses this money to buy various properties. Profits are made through rental income and property sales. Because open-ended real estate funds acquire many different properties, they can spread the risk better.

However, the risky closed-end funds are usually offered by financial advisors at your doorstep. With the signing of the contract, the investor becomes a co-owner of the financed property, which can be an office building, a business park, but also a senior citizens’ residence. If the property cannot be rented out as planned, the entire investment concept wobbles. The investor may lose all of the money invested.

What are the risks of the investment?

The economic success of closed-end funds depends on how successfully the investment property can be rented out should not rely on protection in any circumstances, of the “rental guarantees”, which are often touted as a sales argument. The investors are promised that nothing can happen to them or their fund, as another company guarantees individual rental income. Behind this are regularly financially weak companies that can only guarantee an individual rental income for a few years. If it is not suitable to attain the calculated rent on the market over the long term, the “guarantor” is quickly broke. It can also be the case that the “guarantor” builds loopholes into the guarantee granted by him and does not have to pay in the end.

Long-term rental agreements concluded with well-known companies, for example, from the food industry, offer a little more security in the planning phase. But, it is difficult to consider whether these contracts will be extended again after the lease expires. It becomes very risky if the fund relies entirely on the free rental market – and miscalculates in the process. An oversupply of offices and apartments leads to a drop in prices, a fact that has already resulted in severe losses for many closed-end real estate funds and thus for investors.

If the fund property is vacant for a longer period of time, in the worst-case scenario, the fund could go bankrupt, and the invested capital could be lost. If the participation is then financed with outside capital (i.e. you as the investor have borrowed the money invested), the capital investment can prove to be a threat to your existence, because your loan instalments continue to run there is also a currency risk for fund properties abroad, for example in the USA. Due to currency fluctuations, the return can go up as well as down.

Withdrawal from the contract is often only possible after 15 or 20 years. But even then, it is not the capital employed, but only the current value of the participation that is replaced. This is usually significantly lower than the capital employed because, especially in the initial phase of long-term funds, losses are predominantly produced. The investor cannot check the correctness of the amount himself without outside help. Calling in a specialist costs money again. Even if the sellers of such funds often claim otherwise: There is no significant sales market (“secondary market”) for the units. And finding a buyer yourself is usually hopeless. If the invested money is to be “available” quickly, a closed real estate fund is the completely wrong investment.

Are there any tax benefits?

Only those who pay a lot of taxes can save taxes. For the average earner, this sales argument is almost never true. If the investment advisor promises you a tax advantage without even knowing your specific tax situation, this is a clear warning signal. You also keep in mind that tax laws and personal tax bases are subject to change. Without the “green light” from your own tax advisor, you should therefore not take the tax advantages promised with closed real estate funds at face value.

Which costs arise?

When buying shares in closed real estate funds, an “agio” – often 5 percent and more – is usually added to the investment amount. The sales department collects that. The rest of the money is by no means fully invested. Hidden in the prospectus there are indications that trustees, tax advisors, initiators and credit brokers are drawing further large amounts, sometimes even continuously, from the fund investment. This cashing in jeopardizes the promise of returns. The more the initiators reach into the pot of investor money, the more difficult it becomes to close these gaps in the market through profits. Because fund operators are by no means economic magicians, even if they like to give themselves this image. The providers are obliged to prepare a sales prospectus. This contains the economic and legal details of the relevant fund. It must also show the costs. The most important data are also summarized in brief in the key investor information. They are to be made available to investors before making a purchase decision.

Quality has its price: the lower, the better

Investment Funds. Costs influence the return on any investment. In the case of equity funds, additional annual costs of 1.5 per cent in the case of a one-time investment can halve the capital growth in the long term. Many studies clearly show the connection: Cheaper funds are more attractive in the long term than more expensive ones. We, therefore, advise against funds of funds, because here you get paid twice.

Consultants who advise you on a commission basis also earn money from these annual costs, because they receive a portfolio commission. Products that neither consultants nor the fund industry earns much from are reluctant to sell.

We recommend so-called exchange-traded index funds. These funds do not need expensive fund management because they replicate a stock index such as the Dax. That saves costs and increases your return.

The Past Is Over, The Future Uncertain

Anyone looking for the best funds of the past will always find them. But don’t expect that this quest can help you make decisions about the future.

The best funds of the past few years will at some point be average, because of course, the managers of these funds cannot predict the future either. On top of that, if you move up to the top of fund rankings, you usually run an above-average investment risk. At some point, this will take its toll on, and it is not uncommon for today’s top funds to mutate into tomorrow’s flop funds.

Back And Forth Makes Pockets Empty

Because the future is so uncertain, you shouldn’t try to get into funds at the lowest price and sell at the highest price. This causes unnecessary order fees. Plus, you probably won’t have a lucky hand with this. In any case, many studies have already shown that private investments fare worse on average, the more they trade. Comforting: the professionals are not doing any better.

Discipline Pays Off

You can only expect the long-term returns from equity funds, which many raves about, around 7 percent per year, if you implement your investment strategy with discipline, even when the capital markets get restless.

Two common mistakes to avoid: Don’t buy equity funds because they are doing pretty well right now. And don’t sell equity funds just because they’re doing poorly. The stock markets are always exposed to capricious price capers. Only those who are not impressed by this have a chance to reap long-term returns without significant losses.

Gold ETCs (Exchange Traded Commodities)

Investing With Gold. ETCs are similar to certificates, but they also have similarities with ETFs, the exchange-traded index funds.

ETCs (Exchange Traded Commodities, translated: exchange-traded commodities) are debt securities and are intended to track the performance of commodities as precisely as possible. Legally, they are bonds. ETCs are thus similar to certificates. They share other characteristics with ETFs, the exchange-traded index funds: ETCs are fundamentally indefinite and can be traded on the exchange as you wish.

ETCs are secured in various ways. However, this does not necessarily protect you as an investor from the issuer risk. The well-known gold ETC Xetra-Gold, for example, is 95 per cent secured with physically deposited gold and a further 5 per cent with gold delivery claims. There is still no one hundred per cent security in the event of the issuer’s insolvency. The shares would then be treated in the same way as claims of other possible creditors. So you would be one believer among others with no guarantee that you will see the money you reinvested.

Investing money with the help of ETCs is complicated because not all products reflect the actual gold price. Instead, many ETCs invest in gold futures, which are commodity futures. So they will ultimately depend on contracts for the supply of gold in the future. In good time before the delivery date, however, they sell the contracts and buy a new future. In this way, the companies avoid the problem of actually having to store gold.

However, the prices for futures contracts may differ from the actual gold price. Also, the cost of gold can go up while the price of a gold futures contract goes down.

Creating using ETCs can, therefore be very confusing. To make matters worse, the term ETC is not used consistently. Thus, the following also applies here: If you have not understood how the products work, what risks they entail and how their prices come about, you should not buy them. Exchange fees are incurred when buying and selling ETCs. There are also ongoing administrative costs.

Gold Funds

The so-called gold funds must be clearly distinguished from gold equity funds. You are by no means exclusively investing in gold.

One does not invest – as one might initially assume – in shares of gold mines. Based purely on the term, one could initially assume that only gold is bought with the fund assets. But that is not the case either, as the gold funds approved for sale in Germany are only allowed to purchase gold directly to a certain extent. The rest of the fund’s assets are allocated to other forms of investment – for example, certificates or bonds. Some fund providers even forego investing in the raw material gold entirely and instead buy other investment products from the fund’s assets.

The fund should map the gold price so that investors should also benefit from rising prices. However, you have no guarantee that the fund manager’s requirements will work. The goal of mapping the gold price can also be missed. There is also the risk that the gold price itself will develop negatively.

The term gold fund is often used by providers and the press for gold stock funds. Investors should, therefore clarify precisely how their money is invested and how the respective investment product works. Gold funds are also managed funds that entail corresponding costs. High front-end loads and management fees are always a problem because they reduce returns.

Fund Fees – 4 Tips To Help You Save. Many mutual fund companies charge investors high annual fees for managing their mutual funds. In case which actively managed funds, the cost of passive index funds is typically five to ten times the yearly cost. The performance of expensive products is correspondingly worse.

What consumers can do to reduce annual and further costs can be found in the following four tips for saving :

TIP 1: BUY ETFs

ETFs, i.e. exchange-traded index funds. These funds are not actively managed, but only track an index – for example, the German DAX stock index or the American S&P 500 index. At the same time, the investment companies usually do not pay any commission for the sale of ETFs. Result: The index funds are significantly cheaper than their actively managed counterparts. There are only issue surcharges with ETF savings plans when buying on the stock exchange; only a volume-dependent fee is due. And the running costs are often less than 0.5% per year. The downside: even if the prices are relatively low – there is also a lot of room for improvement with ETFs in terms of fee transparency. And there are also a variety of newly invented ETFs mapping unique indices.

TIP 2: BUY FROM DIRECT BANKS AND FUND BROKERS

You can turn to direct bank aid if you want an actively managed fund, to at least reduce the front-end load that is due on the purchase. Such direct banks do not have their own branch network, so customers usually conduct their business with the bank over the Internet. The banks pass on the resulting cost advantages, at least in part to consumers – for example, in the form of reduced or eliminated sales charges. Direct banks often also work with so-called fund brokers. These usually offer a wide range of investment funds with no sales charge. A little research when deciding for or against a bank can, therefore be worthwhile for consumers. Because: Even when it comes to buying ETFs on the stock exchange or via savings plans, direct banks usually offer better conditions.

TIP 3: NEGOTIATE THE SUBSCRIPTION FEE

If you buy active funds and don’t want to change your bank, you can at least try to negotiate with your own bank about the amount of the issue surcharge when buying funds. Particularly with more considerable investment sums, there may be a discount. However, this does not eliminate the high running costs of the funds.

TIP 4: DON’T CHANGE HORSES TOO OFTEN

Basically: Nobody should regularly change investment products – because often new fees are incurred when buying or selling a new investment. The withholding tax on capital gains is also due when a profitable investment is sold – and reduces the return achieved. Therefore: Even if the seller urges the bank to change a fund, nobody should be put under pressure.

The essentials in brief:

  • The change of the current account is always associated with effort. The old and the new banks are now obliged to help you with this.
  • It is usually cheaper to keep the account online. And the price comparison with entirely different banks/savings banks can also be financially worthwhile.
  • When looking for a suitable current account and switching independently, we will help with information, checklists and sample letters.

Many consumers are willing to switch banks. But how many of the bank customers ready to switch will put their plans into practice? Many people still shy away from taking the last step because they know that changing the current account always involves a lot of effort. Or because they don’t know that the old and new banks should help them.

Bank customers can save money by switching from their old house bank to a more cost-effective provider – because necessary fees, costs for bookings and payment cards and fees for withdrawals at third-party machines quickly add up to a proud amount.

Since September 18, 2016, bank customers have a legal right to have the previous bank and the new bank help them with changing their current account. You can find information on entitlement to accounting switching assistance in our corresponding article. Many institutes have already done this voluntarily. Of course, customers can still switch independently.

DETERMINE WHAT IS IMPORTANT

For those who value personal contact in a branch, a financial institution with its branch network is essential. For those who like to do banking via online or telephone banking, account management at a direct bank is the right choice.

It is usually cheaper to keep the account online. When it comes to withdrawing cash, you should make sure that you can withdraw money from numerous ATMs in the region as cheaply and efficiently as possible. Another critical question is how to best stock up on cash when you are abroad. Some banks now offer their customers the opportunity to withdraw money free of charge worldwide.

CHOOSING THE RIGHT CHECKING ACCOUNT

Our checklist “Criteria for Selecting the Right Current Account” clearly lists the most critical requirements for a current modern account. The best way is to compare the offers from several credit institutions and enter the points that are most important to you. It depends on you whether you value lower costs, an extensive network of ATMs or a branch in your immediate vicinity. But be careful: watch out for disadvantageous clauses, especially when it comes to incredibly cheap offers. For example, banks often require a minimum monthly incoming payment for free current accounts.

CHANGE TO THE NEW PROVIDER

When you have found an offer that fits you, you should switch to a new bank or savings bank – unless you can convince your old institution to make you a better offer. The rule here is: asking doesn’t cost anything If you want to do without the change assistance and organize the move to the new provider yourself, our checklist “Step by step to the new current account” will help.

Correspondence with credit institutes and contractual partners: Our sample letters also make it easier for you to switch. With their help, you can cancel the old current account and inform your contractual partners – from employers to electricity providers – about your new bank details.

  • Sample letter for changing direct debit orders
  • Sample letter for informing the employer
  • Sample letter for terminating the old current account

Occasionally we receive complaints that banks close the account very quickly after sending the cancellation. Consumers could then no longer withdraw money, for example, and had no access to online banking. The reason for this because there are no or only concise notice periods for current accounts and the banks implement the cancellations very quickly.

TIPS FOR YOU!

  • First, open your new account and switch all payments (card payments, standing orders, direct debits, incoming payments from employers, etc.) to the new account.
  • Let the old and new accounts run in parallel for a while (approx. 3 months). Keep a smaller amount in the old version. This is a safeguard against charges that you no longer expected.
  • Do not cancel your old account until you have successfully switched.
  • You should know that you will no longer be able to access your data in online banking after the end of the contract. We recommend that you access and save all documents in good time, especially the bank statements. Otherwise, there is a risk of additional costs for the subsequent creation of the documents.

Dubious Investments On The Internet: How To Recognize A Pyramid Scheme. Great profit promises for small deposits: Pyramid schemes work by more and more people giving their money. But if the system stalls, the illegal business collapses.

The essentials in brief:

  • Pyramid schemes are illegal, but this kind of advertising is often used on the Internet with supposedly high profits.
  • Usually, they run out of breath quickly – and then only a few have made money.
  • We give clues on how you can recognize the forbidden mesh.

High yields and permanent “passive income”: so-called pyramid schemes are advertised with impressive profit margins – now mostly online. Questionable providers use terms such as “donation”, “retirement provision”, “marketing” or “crowdfunding” to advertise on social networks and the Internet.

ATTENTION, PYRAMID SCHEMES!

Speedball systems are not designed for a long time. Only those who have started the whole thing and cash in on investments can benefit. Everyone else will likely lose their stake.

The consumer centres have complained about various providers from eleven federal states. Because of these complaints, the market watchdog finances took a closer look at the websites of over 50 providers: the imprint was missing in more than half of the cases. More than two-thirds of the Internet domains examined are registered abroad, several of them with the same box address in Panama. This makes it incredibly difficult for those affected to enforce their rights here.

FOR EVERY NEW PARTICIPANT THERE IS A “BOUNTY”

The research by the market watchdog team also showed that alike under a post on Facebook is sufficient to be contacted directly by the provider. Cell phone numbers, for example, are exchanged via Facebook Messenger, which give access to WhatsApp groups. The market watchdog experts at the Hessen Consumer Advice Center, therefore warn against fraudulent offers that present themselves online as simple, reputable and high-yield investments.

TIP FOR YOU! Consumers are increasingly complaining about providers who lure them into dubious investments with deals in Bitcoins and other cryptocurrencies. The market watchdog experts at the Hessen Consumer Center are currently investigating complaints about almost 20 different providers and six currencies. Illegal pyramid schemes could also be hidden behind such offers.

WHAT IS A PYRAMID SCHEME?

A snowball system is a term used to describe business models that require a steadily growing number of participants in order to function, for whom you get a “bounty”, analogous to a snowball that rolls down the slope and expands steadily. Profits for attendees come almost exclusively from attracting new attendees who in turn, invest money without receiving any service or product. A rapid spread brings money into the system like a flash in the pan. But it is over just as quickly – the growth in new members cannot last long.

HOW TO RECOGNIZE PYRAMID SCHEMES

From the outside, pyramid schemes should look serious. The initiators are often veiled. In addition, it remains unclear at which stage the respective system is currently.

Since the number of participants would have to increase exponentially, the collapse is inevitable. So how do you know where not to invest money?

  • Do not trust supposedly brilliant business ideas that can be explained quickly. From the sofa, you cannot merely increase money on the computer by persuading other people to participate.
  • Usually, you should be able to start with relatively small amounts – a few hundred euros sound like a manageable risk.
  • Pyramid schemes are always designed to increase the number of participants sharply. You will be pushed to recruit many new members, for each of whom you will receive “bounties”.
  • Typical: A commission always goes to the initiator. In the end, he is the only real winner. Often it is not even clear what the money is being used for – then you should be particularly careful.
  • You should often be able to reach different levels or positions according to which your profit is based. Sole purpose: You should try to involve more and more people and their money.

Classification and perception of pension systems around the World. “Delevoye reform”, CSG applied to retirees, revaluation of the minimum old age … the retirement system in France is often the subject of debate. Through the analysis of 2 studies, this article takes stock of the situation in France compared to the rest of the world. The first assesses the quality of the system, the other the way in which workers prepare for retirement around the world.

Mercer ranking, France in the middle of the table

Mercer unveiled in 2018 a new edition of the Mercer Melbourne Index (MMGPI) which measures pension systems around the world. He analyzed 34 plans based on more than 40 indicators to try to determine their performance, sustainability and integrity.

The study reveals a growing tension in pension systems around the world in reconciling 2 objectives: ensuring an adequate standard of living for retirees (performance criterion) and guaranteeing the financial sustainability of the system (viability criterion). The integrity criterion, for its part, assesses the quality of governance and the control of management costs.

With an overall score of 80.3 out of 100, the Netherlands took 1st place from Denmark in 2018. That year, as in 2017, France is in the middle of the ranking. She is 17th out of 34, with an overall score of 60.7 (for an average of 60.5). It scores very well on performance (79.5), lower on viability (42.2) and integrity (56.5).

But the reforms planned at the time (Pacte law, Agirc-Arrco merger, comprehensive pension reform), which the 2018 study did not take into account, should improve its rating on the criteria of viability and integrity.

Assets unevenly prepared for retirement

HSBC published in 2018 the 15th edition of its benchmarking study on pensions, titled Bridging the Gap (“Bridging the Gap”). This study reflects the opinions of more than 17,000 people in 16 countries.

Internationally, the perception of retirement is generally positive. Most of those questioned of working age hope to find greater freedom (72%), open up to new hobbies (75%) and regain physical shape (59%). The French are more enthusiastic about the first 2 items (75% and 76% respectively), but less about the idea of ​​returning to sport (47%)!

53% of French people of working age associate retirement with tranquility. It is also synonymous with relaxation (38%) and happiness (33%). Only 12% associate retirement with a feeling of boredom.

Internationally, 58% of respondents intend to continue working after retirement. This trend is least represented in France (32%), against 60% in China or 48% in the United Kingdom. While globally, 42% of people of working age plan to embark on an entrepreneurial project in retirement, they are only 18% in France, compared to 36% in the United States and 54% in India.

If, globally, 26% of people of working age say they save regularly for their future life, 43% say they live financially from day to day: 28% in France, 54% in China, 44% in the United Kingdom).

Despite a significantly longer life expectancy than that of men, women are less well prepared for retirement. Globally, only 29% of women of working age say they contribute much more or a little more than their partner to the couple’s retirement savings. In France, they are only 13%.

Is the US economy on the rise, as Donald Trump claims? FACK CHECKING. Donald Trump is delighted with a rebound in the US economy six months after the onset of the health crisis. While the numbers do point to an increase in employment, there is no room for optimism. By Jeremy Ghez, HEC Paris Business School (*)

Donald Trump repeats over and over again that the economy is doing better and that the post-Covid recovery is here because of the “incredible work” done by his administration. “We had to close the economy because of the Chinese virus, but now we are reopening it, and our companies are breaking activity records”, he defended during the first presidential debate opposing him to Joe Biden on September 29. . According to Donald Trump, his administration put 10.4 million Americans back to work in just four months.

The rise in income and rebound in stock market values

The claim is correct: the figures, which come from the US Bureau of Labor Statistics, remind us that there has indeed been a turning point since May. They give hope that this historic recession may be short-lived.

This hope is fueled by other encouraging news about the state of the US economy. In 2019, before the start of the pandemic, the United States saw an increase in the income of the median American household – an increase that also benefited the poorest Americans. The current economic difficulties should therefore not eclipse the progress made, in favour of the poorest in particular – the result, say the supporters of Donald Trump today, of this administration’s efforts in terms of deregulation and the tax reform of 2017, which has enabled the private sector to invest and undertake again.

Added to this is the rebound in stock market values ​​which is boosting the morale of part of the population. In the second quarter of 2020, the value of Americans’ wealth saw a rebound of nearly 7% in the second quarter – the largest rebound in the history of the country. This rebound in the value of Americans’ assets contributes to optimism, at a time when the public debt is widening under the effect of the massive stimulus plan of the spring. We now know that some Americans have used the money they received from the federal government to invest in the stock market.

But this assertion on job creation is also misleading since according to the same source, 22 million jobs were destroyed in the spring of 2020, with the start of the pandemic. It also masks the fact that a certain number of jobs could have been permanently or even permanently destroyed. According to calculations by Indeed, an American recruiting firm, job offers in key states of New York or California are down 30% from 2019.

The end of the longest period of economic expansion

Other regions, which had experienced a short-lived upturn, are seeing the number of job vacancies drop again. The mobility of American workers, which once helped redress imbalances in the labour market, no longer works as before, as the pandemic has hit the country as a whole. The prospect of a lasting slowdown in job creation is more than plausible. Some sectors are particularly affected, such as the airline industry hit by new waves of layoffs since last week, or tourism, as shown by the layoff of 28,000 people at Disney.

In the end, UBS bank economist Brian Rose estimates that the number of Americans who have lost their jobs permanently could reach 5 million people. In October, the US economy created fewer than 700,000 jobs, a sign of an undeniable slowdown in the vitality of the labour market that has been observed since the turn of May. The effects of the stimulus plan, which widened the American debt are thus showing their limits.

This is why Donald Trump’s enthusiasm should not make people forget that the recovery could be difficult, as the uncertainty hanging over the economy is significant: the strategy of reassuring the public by relying on a massive stimulus plan is no longer bearing such fruit in a context of deep political divisions and a health crisis caused by a virus whose operation we do not really understand. Those who were hoping for a “V” shaped recovery, with a real and rapid rebound in the economy once health restrictions were lifted now fear the scenario of a “swoosh” recovery (the name given to the logo of a large sporting goods brand), with a very short-lived recession, but a rebound that was as slow as it was fragile.

Worse still, the prospect of a recovery in “K”: a part of the economy and the wealthy population, strong of its savings and relying on the stock market upturn, manages to pull out of the game, while other sectors and minorities, more vulnerable, see their lot durably affected by the effects of the health crisis. In particular, we can underline that the distribution and tech sectors have greatly benefited from the crisis, while the airline industry and tourism have suffered deeply. Figures from the US Census Bureau for food retailing and distribution confirm this. Likewise, the disconnect between the US consumer confidence index and the stock market rise suggests that this recovery may not benefit everyone.

The health crisis halted the longest economic expansion in US history. This officially ended after 128 months of growth – eight more than the previous record, between the cold war and the attacks of September 2001. Is this recession to be blamed on the executive? Or is it the result of an external shock, independent of the actions of the Trump administration?

What impact on the election?

The way in which the stake of this election will be formulated is fundamental: poll after poll, we see that Americans have a positive image of Donald Trump’s economic record, but remain more reserved in relation to his management of the crisis. A recent New York Times poll confirms this. And these perceptions are all the more important since, during the electoral campaign, the programs will have occupied very little center stage, as we could see during the first presidential debate. For this reason, if the economic record of the outgoing president returns to the heart of the campaign, the creation of 10.4 million jobs in the space of 4 months can favor Donald Trump. On the other hand, if the debate focuses above all on the management of the health crisis by the tenant of the White House and on the future of the health system, then the difficult and uneven recovery which does not benefit all Americans risks deeply affect his chances of re-election.

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