DÉFENSE ZONE
Investing in defence stocks can be an interesting strategy to protect your portfolio against economic fluctuations and make your money work. Here are some good practices for investing easily and at low cost in this sector.
This article is taken from our Pro&Business supplement issue 15.
First of all, it is important to understand why to invest in defence shares. These companies tend to be less affected by economic fluctuations, as they provide essential products and services for national security. In addition, investing in these securities can help protect your savings against the risk of inflation (4.9% in France in 2023), as your savings will then be placed in shares rather than held in euros.
Using the right tools
To invest easily and at low cost in defence stocks, it is recommended to use online brokers such as Trade Republic or Bourse Direct (a partner of Défense Zone).
These platforms make it possible to buy and sell shares easily and with reduced fees, unlike the offers from your traditional bank. Whichever solution you choose, it is important to watch out for hidden fees such as account maintenance fees and transaction fees.
Earning dividends
Dividends are another advantage of investing in defence stocks. Companies in this sector tend to pay regular dividends to their shareholders, which can provide a passive income stream. In addition, dividends can be reinvested to buy more shares, which can increase the value of the portfolio over the long term.
Securities account vs PEA
In France, there are two types of account for investing on the stock market: the securities account (compte-titres) and the PEA (Plan d’Épargne en Actions, a share savings plan). The PEA offers attractive tax advantages, as capital gains and dividends are exempt from income tax after the account has been held for five years (note that gains remain subject to social security contributions). However, the PEA is limited to European shares and there is a deposit ceiling of 150,000 euros.
The securities account, on the other hand, allows you to invest in shares from all over the world, but capital gains and dividends are taxable.
A risky investment
Finally, it is important to be aware of the risks of investing in defence stocks. Although these companies are considered safe-haven securities, they are not without risk. Market fluctuations, changes in government policy and geopolitical conflicts can all affect the performance of these companies. It is therefore important to diversify your portfolio and not to invest more money than you can afford to lose.
Bourse Direct partner offer
We have negotiated a welcome offer with our partner Bourse Direct. For any account opened before 12 November, they will give you €200 in brokerage fees.
Click here to request information (it is free and without obligation)
In addition, you will also receive, free of charge, our last two Pro&Business supplements, devoted to the question of defence financing and to investment opportunities on the various stock exchanges.
Simply contact us once your account has been opened to receive them.
