European and US equity markets have experienced periods of high volatility since 2022, amid geopolitical tensions, interest rate hikes and trade uncertainty. Against this backdrop, the number of active retail investors continues to grow, driven by the wider availability of online brokers and ETFs. The AMF has noted a marked shift toward younger investors, many of whom are self-directed and digitally connected, but whose measured level of knowledge does not always match their confidence.
The confidence-competence gap: what the AMF sees among new investors
A joint study by the AMF and the OECD, published in 2024, describes a phenomenon worth examining. New retail investors, often under 35, say they feel comfortable with financial products. Their confidence in their own knowledge is high.
The problem is that financial literacy tests conducted as part of the same study reveal a clear gap between perception and reality. Many of these investors do not understand the basics: how diversification affects risk, how recurring fees impact long-term performance, or the difference between nominal and real returns.
This gap has tangible consequences. It leads investors to choose shorter investment horizons than their age would allow, and to make decisions based on information picked up on social media or through artificial intelligence tools.
A July 2025 article in Les Échos confirms that the AMF considers these channels an emerging issue, without endorsing them as substitutes for structured personal analysis. To learn more about market mechanics and investment strategies, Finance Technique’s stock market section offers regularly updated content on these topics.
ETFs, PEA and life insurance: choose the account wrapper before the investment
Before selecting stocks or funds, the first key decision is which tax wrapper to use. This choice determines how gains are taxed, which investments are available and how flexibly the portfolio can be managed.
PEA: a tax-efficient framework, subject to conditions
The equity savings plan (PEA) remains the go-to account for investing in European stocks. After five years, capital gains and dividends are exempt from income tax (social security contributions still apply). The main restriction concerns eligible investments: only securities issued by companies headquartered in the European Union or the European Economic Area can be held in the account.
However, PEA-eligible ETFs can partly overcome this limitation. Some synthetic-replication ETFs provide exposure to US or global indices while remaining within a PEA. According to an analysis published by Revue Banque in 2026, this is one of the products most frequently traded by investors under 35.
Multi-support life insurance: flexibility and estate planning
Multi-support life insurance offers a different framework. It allows investors to combine euro-denominated funds (with guaranteed capital) and unit-linked investments (stocks, bonds, ETFs and real estate). The tax benefits apply after eight years, with an annual allowance on gains when making withdrawals. The account also offers estate-planning benefits, as transferred assets may qualify for reduced taxation up to certain limits.
The choice between a PEA and life insurance is not an either-or decision. Both can be part of an overall wealth strategy, each serving a different purpose.
Building a portfolio: diversification and risk management
Diversification is the only way to reduce risk at no cost. Spreading investments across asset classes, regions and sectors limits the impact of a single downturn on the portfolio as a whole.
In practice, ETFs make diversification easier. A single global equity ETF tracks an index made up of hundreds or even thousands of securities. Global and US equity ETFs have been among the products most frequently traded by retail investors in recent years, according to data cited by Revue Banque.
Risk management goes beyond diversification. It also means defining:
- An investment horizon that aligns with your goals: investing in the stock market for less than five years carries a significant risk of loss, even with diversified indices
- A target allocation across stocks, bonds and cash, reviewed periodically as your personal circumstances change
- An investment budget that does not eat into your emergency savings—the funds you need to cover unexpected expenses over several months
Fundamental and technical analysis: two ways of reading the markets
Two approaches are used to assess a security or market, and they answer different questions.
Fundamental analysis examines a company’s financial health: revenue, earnings, debt levels and industry outlook. It aims to determine whether a stock’s price reflects the company’s true value. This approach suits investors with a medium- to long-term outlook.
Technical analysis focuses on price movements and trading volumes. It identifies trends, support and resistance levels based on historical prices. It is used more often for short-term trading and decisions about when to buy or sell.
Neither method guarantees results. Companies’ published financial data may be incomplete or difficult for non-professionals to interpret. Technical signals, meanwhile, rely on statistical patterns whose reliability varies with market conditions. Combining both approaches is common among experienced investors, but it does not eliminate the risk of losing capital.
Fees and taxes: factors that erode returns
A portfolio can deliver satisfactory gross performance yet disappointing net returns. Brokerage fees, fund and ETF management fees, and taxes on gains are often underestimated by beginner investors.
- Annual ETF management fees vary by product, but are generally lower than those charged by actively managed funds. Comparing ongoing charges before choosing a fund is a basic habit
- Brokerage fees depend on the broker and order type. Some online brokers offer commission-free trades on a selection of ETFs
- Tax treatment depends on the account wrapper (PEA, life insurance or ordinary securities account) and the holding period. By default, gains in an ordinary securities account are subject to the flat tax
Over a long investment horizon, the difference between a high-fee fund and a low-cost ETF can account for a significant share of the capital accumulated. This factor should be considered when building a portfolio, not just when reviewing its performance.
