CAC40: how to invest wisely in French stocks?

Is it possible to get started in the French stock market with a budget of 5,000 euros? You may have already asked yourself this question. We answer it for you.

 

The covid-19 crisis has well and truly capsized the stock markets. This opportunity has given you wings and you tell yourself that it’s the perfect time to invest some money in stocks. With an investment of 5,000 euros, you can take your first steps and build up a stock portfolio for long-term investment. Find out which strong and resilient investment sectors to focus on.

Bet on 10 solid stocks

You have a budget of 5,000 euros but you don’t want to take excessive risks. You may wonder what stocks to buy right now, or as we say in French, quelles actions acheter en ce moment? You should therefore concentrate on French companies with a proven track record and diversify your investments.

 

By betting on 10 stocks with a value of 500 euros each, you will reach your goal. You will be able to follow the Paris stock market on a daily basis through different indices such as the CAC 40 or the SBF120, the broader index calculated each day from the prices of the 40 CAC 40 stocks and 80 major intermediate-sized stocks.

 

Follow the news of the quoted companies in the press, on the communiqués and on specialized sites like Boursorama. You may have to make arbitrages (buy or sell) based on the latest earnings releases. Here are some solid sectors, despite the headwinds, on which you could take long-term positions.

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Example of portfolio composition with 10 stocks

Buy Biomérieux at 125 euros, Sanofi at 85 euros, LVMH at 700 euros, L’Oréal at 415 euros, Neoen at 35 euros, Schneider Electric at 160 euros, Bouygues at 30 euros, Air Liquide at 150 euros, Dassault Systèmes at 50 euros, Veolia at 30 euros.

Health stocks are popular

The coronavirus crisis is a « health » crisis to which some companies in the health sector have rushed to find answers while waiting for a laboratory to finally find an effective vaccine. On the stock market, this is reflected in the growing interest of investors in the health sector and in the rising valuations of the companies concerned. Sanofi reported a 15.9% increase in net income in the first quarter of 2020 compared to the same period last year, and the stock is holding up well, with the market closely following the group’s announcements about ongoing trials of an experimental vaccine against co-infection with co-infection in thousands of patients. In another example, the share price of diagnostics specialist Biomérieux has jumped nearly 30% since the beginning of the year.

Luxury goods are resisting despite everything

With the lockdown, consumption of luxury goods has come to a complete halt in many parts of the world, including Asia, which is usually fond of high-end French brands. On the stock market, it is a different story. First, for Hermès, which has weathered the global crisis rather well compared to its direct competitors thanks to its very high-end positioning and a long waiting list for certain products.

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Another heavyweight in French luxury goods is LVMH. The luxury group controlled by the Arnault family has however noted, like its peers, a recovery in China of sales of French luxury products. It is also very well diversified and financially solid.

The renewable energy sector is holding its own

The renewable energy sector has been on the rise in recent years. Countries are called upon to reduce greenhouse gas emissions in order to save the planet and curb climate change. With this in mind, many listed companies have embarked on sustainable projects, producing alternative solutions (wind, solar, hydraulic and biomass). Investments in the energy transition seem crucial today.

 

The solar and wind energy producer Neoen experienced the stock market downturn like everyone else in March 2020, but the stock quickly recovered, especially after the publication of a good turnover in the first quarter and a reassuring outlook.

 

The green electricity producer Voltalia, for its part, has seen its energy sales boosted by the ramp-up of new power plants, particularly outside Brazil. In France, which accounts for 30% of revenues, production rose by more than 50% thanks to the new wind, solar and hydroelectric power plants installed in 2019, as well as the very good performance of older wind power plants.

 

The subsidiary Helexia won new contracts in France, in particular for photovoltaic shading and self-consumption roofing projects for major retailers.

 

Finally, Albioma, the leading producer of photovoltaic energy in the French overseas territories, confirmed its objectives with a 13% increase in revenues in the first quarter. The company was able to maintain the operation of its facilities, in particular thanks to a short shutdown of the Codora power plant in Brazil, which was able to restart its production on March 2.

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