How much can 20,000 euros on PEA bring in in 5 years?

The Stock Savings Plan (PEA) is the flagship product, which is very popular among the French to avail of advantageous tax benefits. PEA allows you to bet on the short, medium or long term performance of companies.

In the medium term, what returns can we expect with an initial deposit of 20,000 euros on a PEA for a period of 5 years? To answer this, let’s look at different possible scenarios.

Estimate the potential benefits with a deposit of 20,000 euros over 5 years

To assess what it is possible to get with a deposit of 20,000 euros invested in an equity savings plan for 5 years, several factors should be considered: the choice of investment vehicles, the historical performance of stock market indices and the potential costs.

Investment supports

Within the framework of PEA, you can choose different approaches:

• Invest directly In shares of listed companies: This allows for careful selection of securities, but requires solid knowledge of companies and markets.
• Diversify your investments Through funds, CFDs or ETFs: This strategy minimizes the risks associated with fluctuations in a particular sector or company
• Mix the two options to take advantage of specific opportunities while reducing exposure

Historical performance of stock indices

To estimate future gains, we can rely on past returns of major European stock market indices, such as the CAC 40 (France), DAX 30 (Germany) or FTSE 100 (United Kingdom).

Since 1990, despite the dark years, the CAC 40 has returned an average of 6.5% annually.

Over the past 5 years, the CAC 40 has posted an average annual return of around 9%, while the DAX 30 and FTSE 100 have fluctuated between 5% and 8%.

Based on these figures, an initial investment of 20,000 euros in PEA would have generated a gross profit of between 5,500 and 10,200 euros over 5 years.

Potential costs

To calculate the net return, it needs to be deducted expenses Regarding plan management:

• Brokerage fees for buying and selling stocks or funds
• Annual management fee, proportional to the amount of assets
• Inactivity.

These costs vary depending on institutions and offers. However, we can estimate that their impact on earnings is typically between 0.5% and 2% per year, meaning a total deduction of between 500 and 2,000 euros over a 5-year period.

Expect to be successful in your investment

Earning money on PEA with a deposit of 20,000 euros for 5 years requires a thoughtful and proactive approach.