Safeguard assets How to make a fortune even in times of inflation 

In today’s volatile economic environment, investors crave security and stability more than ever. Geopolitical crises and rising energy prices continue to create uncertainty. Added to this is inflation, which causes a loss in value year after year.

Therefore, it is now crucial to understand how to not only increase but also maintain your wealth. In this article, we highlight the most important aspects of preserving assets.

Why preserving wealth is more important today than ever

Changes in the global financial market

The last decade recovered from the banking crisis in 2008, when the euro crisis began two years later: Government debt rose, banks fell into distress and the economy suffered. But all of this was soon forgotten: The economy boomed again, there was cheap money due to the low interest rates, the number of investors rose as well as the number of risky investment opportunities. Bitcoin is just one prominent example of this.

It wasn't just in Silicon Valley that investments were made in many smaller technology companies, sometimes with just one idea, that a new hype emerged that stretched over several years.  

But the hype ended in 2020 at the latest: Starting with the coronavirus pandemic, recent years have reminded us how crises can come from nothing and result in major cuts. The financial market collapsed massively with the emergence of SARS-CoV-2, then recovered rapidly - and then received a massive damper again from rising interest rates.

Since then, the stock markets have been characterised in part by wild movements back and forth. From mid-2024, the ECB gradually lowered key interest rates again, and inflation approached the target of two per cent at the beginning of 2026. However, with the Iran war and the subsequent energy price shock, inflation has once again climbed above the mark, and investors are again looking more cautiously at the markets. At present, hardly anyone seems to expect the world to return to normal in the short term.

To keep your capital stable, you need the right strategy for securing your assets.

The phenomenon of inflation: Causes and consequences for investors 

Securing assets is particularly challenging in these times: inflation is high and even tangible in the supermarket around the corner. It all started with the pandemic. In order to prevent a collapse, the central banks have printed much more money than usual and kept interest rates low. This made it easier for states to indebted themselves to launch stimulus programmes and provide economic aid so that as many companies as possible could get through the crisis.

This worked quite well, but now there is more money in circulation. And - in simple terms - if there is a lot of money, then more can be demanded. Prices are rising. In addition, the pandemic has also paralysed factories, ports and logistics. It was possible to produce less. Soon rising demand exceeded supply, an additional driver for inflation. After all, rising energy prices are driving up the inflation rate.

Inflation is calculated monthly by the Federal Statistical Office: The prices of around 750 goods - they come from all areas of daily demand - are determined and weighted according to the assumed average demand. The price development of this shopping basket is also known as the consumer price index.

If average prices have risen compared to the previous year’s month, we speak of inflation. If they have fallen, which is rather rare, it is called deflation. 

Central banks around the world, including the European Central Bank (ECB) and the US Federal Reserve (FED), have set themselves a small target of inflation of almost 2%. Following a phase of significant interest rate hikes, they have gradually lowered key interest rates again since mid-2024 - and have paused interest rates for the time being with the latest rise in inflation.

The real return is the decisive factor for preserving the assets. Real return is the actual purchasing power of an amount of money over time. For example, if wealth is invested as fixed-term deposits, the ratio of interest rates and inflation rates determines whether purchasing power increases or decreases. 

Inflation, in turn, has a negative impact on purchasing power. For wealth to actually be preserved, interest rates must be higher than inflation. And this is not currently the case in this country. So wealth is shrinking.

However, even if you invest in equities, for example, inflation can put pressure on returns: If the company is struggling with higher production costs, for example, this affects the dividend and the price.

Fundamentals of asset preservation

Wealth building is the process of increasing capital through investments and savings. The goal is clear: Generate more assets with high-yield investments. Because returns are always associated with risk, it ideally takes a longer investment horizon to be able to endure setbacks and weak phases.

Asset preservation is the strategy for preserving existing capital and minimising losses. It usually only comes into effect when an asset already exists, which is now to be protected. Wealth preservation often plays a role as we get older, if wealth was previously built up and it is available - and if it is now to serve as security.  

Just like for wealth building, investing capital is also advisable for preserving wealth and requires an active strategy, because if wealth were only left in the account as money, there would be a loss in value - according to the current inflation rate and key interest rate.  

Your own risk profile is also decisive for whether you should focus on wealth building or preservation. Wealth building involves increased risk. If you are already wealthy and do not see the need to increase your assets further, preserving assets is the less risky alternative: It protects assets against loss of purchasing power and may preserve them for subsequent generations.

The long-term approach: Security for maximum return

A long-term investment normally extends over a period of at least 12 years. It is not based on current trends and fashions, but has a broader horizon.  

This has several benefits. Time becomes an ally in long-term investment in many ways:

• One of these is the interest rate: because the money is not deducted, the interest rate increases every year because the interest-bearing assets serve as the basis for calculating the new interest rates.
• In addition, long-term investments can also offset shorter-term volatility risks, for example by bridging periods of weakness through a longer holding period.

This ensures real security - and at the same time a feeling of security. There is no pressure or stress to beat the market, enter and exit at the right time. In certain phases of life - for example, when you already have a certain amount of wealth and are not dependent on increasing it further - or even in economically uncertain times, such security can be more important than achieving maximum return.

Long-term asset preservation strategies

Diversification and risk management

Diversification is the allocation of investments to different asset classes or instruments in order to reduce risk. For example, Instead of investing all the money in the equities of a single company, it is allocated to equities, bonds, real estate and commodities in the interests of diversification.

Risk management is the process of identifying, evaluating and minimising losses. To limit losses in volatile times, for example, you can place a stop-loss order for your investment in a company’s shares: If the share falls below a certain price, it is automatically sold.  

As returns are generally always “buy” with risk, investments are considered particularly attractive if they have an attractive return and at the same time have a rather low risk class. 

Investment options to secure assets

Equity & Investment Funds: Opportunistic, but often also risky

As shares in companies, equities offer opportunities for high returns, but they also involve a certain risk: If a company is successful, the value of its shares rises; if it fails, the value can fall.

(Equity) investment funds are pools of funds invested in a variety of companies - this offers diversification compared to direct investment in individual shares. Investing in funds therefore means increasing the diversification of the portfolio. If an equity fund invests in companies from different sectors, this ensures even more diversification.

The benefits of investing in companies are the possibility of high returns and possible dividend payments, while investment funds significantly increase diversification. However, corporate equities are also subject to risk, which includes market fluctuations and company-specific risks. Although the latter can absorb investment funds in part, there is also a risk here in the form of possible management errors.

ETFs are not affected by management risks. ETF stands for Exchange Traded Funds. These funds are not actively managed, instead they track, for example, an equity index or a certain known one-to-one mix of equities.

There are also other forms of investment funds that invest in other investment areas rather than in equities. These include real estate funds. These other investment funds will be discussed in the next chapters.

In principle, investing in companies is almost indispensable for wealth building. However, they are losing some significance in asset protection, also because they generally rely on broader diversification.

Daily/fixed deposit: The classic “safe” systems 

Fixed-term deposits are parked as deposits with the banks for a specified period. Overnight money is also a deposit with a bank, but it is available daily.  
Overnight and fixed-term deposits have a low risk, even if the bank runs out of liquidity, deposits are usually legally secured. Fixed-term deposits also provide fixed interest rates and thus predictability.

But the returns - here: interest rates are usually low, especially in low-interest periods. If inflation is higher, which is usually the case, then inflation “eats” the real value of money.  

Currently, money in a cash overnight account also yields less interest than the inflation rate, which leads to a real loss in value. Daily deposits and fixed-term deposits are therefore suitable for short-term parking of parts of the assets, but are not suitable as long-term investments.

Properties: The good old brick and mortar

There are different types of real estate: Residential, commercial, agricultural and specialty properties. All properties are tangible assets that often increase in value over time. They can also generate returns in the form of rental income and contribute to portfolio diversification.

But they also have risks: The real estate market is also subject to some volatility, which can sometimes be high. In addition, high initial investments are required and there are often ongoing costs, such as for administration. Therefore, people like to invest in an indirect variant, for example in open-ended real estate funds.

Whether the investment is in your own home, in a specific property or in a good, proven real estate fund: Real estate belongs in every portfolio and is very suitable for preserving assets.

Renewable energy sources: The future-oriented sector

People need more and more energy. At the same time, climate change requires controlling emissions and reducing fossil fuels. The solution is renewable energies that generate little carbon dioxide and particulate matter. The importance of clean electricity is likely to increase massively in an increasingly electrified society that relies on e-mobility and heat pumps.

Renewable energies can be divided into the sectors of wind, solar, hydropower and biomass, among others. You benefit from an investment that is both economically future-oriented and environmentally sustainable. Demand for electricity from renewable energies is constantly increasing, and in many countries expansion is being accelerated by state subsidies and subsidies.

What is particularly appealing is that renewable energies are a future field, but at the same time offer a certain degree of certainty and predictability of returns through purchase agreements over a longer period of time. When constructing a solar park, we don't think from quarter to quarter, but often over decades.

Increasing competition, regulatory uncertainties and technological changes are risks of renewable energies. A wind farm can deliver constant energy over many years, but it also presents challenges such as maintenance, which can put pressure on the return on investment if it becomes increasingly technologically complex.

For this reason, the best rule also applies to renewable energies: "Diversificationin diversification". In other words: Further diversify within renewable energies to mitigate potential risks. This is made possible by investment funds that specialise in renewable energies and invest in various projects and sectors such as wind, solar and biomass.