Purchasing power: how to put money aside in the midst of inflation?

Can we, or should we, continue to engage in a savings process when inflation has never been so high for several decades? The question deserves to be asked, if only because it implies a dilemma: how to save money when purchasing power is falling?

“One thing is certain, we must continue to savetranche Olivia Egger, head of the heritage engineering division at the Caisse d’épargne Languedoc-Roussillon. Inflation certainly leads to a drop in purchasing power, but we can continue to save by diversifying.

Co-founder of NetInvestissement, a marketplace of investment solutions, Karl Toussaint du Wast recalls that “the savings strategy must be there to offset inflation, so find investments that generate at least 5% of inflation”.

Subscription savings

So, which products to focus on? Not the funds in euros in any case. This is the observation made by Stellane Cohen, president of the specialized firm Altaprofits. “They are in the background, she notes. They are losing importance due to lower yields.”

The safe bet remains… the stone. In other words, real estate. “Real estate now allows you to obtain very attractive returns, between 4% and 6%”estimates Éric Mota, of the cabinet Forsis, of management of inheritance, installed in Béziers.

Another solution, for the latter: furnished rentals (LMNP). “It’s another way of fighting the crisis and it generates a drop in spending through tax exemption.” “Real estate investments have the advantage of being decorrelated from the financial markets”adds Olivier Egger.

The latter also puts forward a rather flexible formula: savings by subscription, very practical in times of inflation. “We put the amount that we can invest monthly, regardless of the product.” Advantage : “We smooth out the risk vis-à-vis the fluctuations of the financial markets.” This savings formula is “compatible with three essential products” : life insurance, PER and PEA, “which is coming back well, especially with young savers”.

The risk, but measured, is what Karl Toussaint du Wast recommends. “In times of inflation, it makes sense to hold 5% to 15% of your savings in gold and precious metals, which have historically always built up anti-inflation reserves.” He estimates that the ounce of gold, which today is around 1,800-1,900 dollars, “should reach $2,500 by the end of the year, an increase of 25%”.

And then, inflation can also be good. “Since there is inflation, you might as well invest in what causes this inflation: gas, oil, food commodities.”

Finally, among the funds in which it is today, in a context of inflation, relevant to invest, Stellane Cohen cites the Euro Croissance fund. “It outperforms traditional funds. It yields more than 3% when the others are, on average, around 1.10% and 1.20%.”