What are the best medium-term investments?

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5 min
By Birdee
There are a number of investment options to make your savings grow without needing to commit over the very long term. Find out which ones ! 

Although the legal authorities have never defined what a medium-term investment is exactly, they are usually viewed as an investment of approximately 2 to 5 years. If your objective is to invest to finance projects sensibly and without taking too much risk, this investment horizon may be just right for you. Generally speaking, long-term investments offer the highest returns but there are attractive exceptions out there. 


Ready access to your money isn't your priority? You don't plan to withdraw any money from your investment in the next six months to a year? If this is the case, you are well placed to make your capital grow, provided you choose your investment wisely and remain consistent. Birdee recommends steering clear of savings accounts which are perfect for the short term. But at 0.5% their return is below the inflation rate meaning you lose more money and you earn in the end. Instead, focus on:   



A Savings Plan in Shares (also known as PEA in French) is an attractive investment in the stock market. Did you say stock market? But that means investing in stocks and shares?! Although the risk is higher than with bonds, the potential returns are also higher. With a PEA, the taxation also becomes advantageous after 5 years of ownership. Ideally, try to maximise the duration of this investment over this period.  

Birdee offers portfolios composed essentially of ETFs and adapted to your risk profile. As a reminder, ETFs are financial instruments that replicate the performance of a given index, for example the French CAC 40, the Belgian BEL 20 or the European Eurostock. They can also be linked to a sector index, such as agricultural or other commodities. The advantage compared to shares? You invest in hundreds of companies or sectors at once! And as always at Birdee, we make sure that our portfolios are the best combination of assets in terms of both performance and risk exposure!   



France's favourite sort of investment has some serious arguments in its favour. It allows you to invest in secure funds, but also to take a little more risk (and thus generate returns!) in more profitable unit-linked products. It's also worth dispelling an old adage that's still doing the rounds: withdrawals are neither blocked nor disadvantageous before the policy's eighth anniversary! This "ominous" timing stems from the fact that life insurance provides more advantageous withdrawal conditions from the eighth year onwards. But you have every right to withdraw the funds earlier.  

The other advantage is that you can open a life insurance policy today and decide in your risk exposure later. Are you the cautious type who prioritises maximum security? We understand perfectly. Birdee offers our French investors portfolios that are in step with their risk aversion and which are balanced both to protect their capital and generate stable returns over time.  



Employee savings schemes allow employees to share in a company's results or profits (participation). Great! So let's say the company is doing well, then what? Employees can invest the amounts received in two different products: a PER (retirement savings plan) or a PEE (company savings plan). When it comes to medium-term investments, the PEE is a great choice because you can access your money after 5 years. What if I want to withdraw my money earlier? Earlier withdrawals are possible, but you'll need a very good reason (resignation, moving, joining your spouse, etc.)  



Generally reserved for long-term investments, real estate can also be attractive for shorter periods... as long as you invest in the right product! Forget apartments and houses, they simply aren't attractive over a 2-year horizon. The merits of a real estate investment begin to improve after five years, but do you really want all that administrative paperwork and the hight taxes? Not to mention that the property itself will have had only a relatively short time to appreciate.   

The best real estate investments are garages, car parks or storage units.  These properties are more flexible than residential rental investments but also less risky (not to mention they cost less to buy). The gross return can be up to 8% in some areas (against 4% for apartments) and if you want to resell, you will find a buyer overnight (the same is true of apartments, but the process is muuuuuch longer ...) ;) Of course, wherever possible, try to see this investment as one that matures, making it more suitable for people who plan to hold on for 4 or 5 years.  

As you can see, your investment choice very much depends on how long you want to sit on it. As always, the best returns are achieved over longer periods of time, but it is also possible to make good money with a little flair ;)  


In any case, good returns are possible on a 2 to 5 year horizon even if your risk aversion is high. Our defensive portfolio, for example, achieved a return of +2.42% in the first half of 2021, i.e. twice as high as the Livret A. Multiply this figure over 2 or 5 years, and that gives you an idea of the returns you could see.  

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