Prices Soar. Forevermore.

Not long ago, a pint of beer in Vienna would set you back only 3 euros. Now the price has soared past 6 euros. Can that be right? Yes, because inflation is as certain as the Amen in church.

Money is a measure for comparing different goods and assets. It is also a means of exchanging one asset for another or receiving food and shelter in return for a service.

However, money is not a good store of value. Maybe for a few days. But certainly not for a few years.

If you don’t immediately convert your labor or entrepreneurial performance into a loaf of bread, you turn the proceeds into money. In that moment, you become an investor. Leaving the money in your wallet or depositing it into your account is already an investment decision. You are now invested in the money market.

The argument: “I'm not interested in any of this” therefore doesn't hold water. The philosopher Paul Watzlawick once said: “One cannot not communicate.” In the same way, you cannot not invest.

Too much money market

Of course, one must first be in the fortunate position of having money left over at the end of the month. But you, dear readers of the Gutmann Viewpoint newsletter, are surely well passed this point.

You must confront the issue of ever-increasing prices. If your savings linger too long in the money market, inflation starts to eat away at their purchase value. In recent years, this has been clearly noticeable for all of us. But most of the time it happens so gradually that we don't give it much thought. How else can it be that even during the zero-interest phase, hundreds of billions of euros were sitting in savings accounts in Austria?

My experience is that even wealthy individuals hold large amounts in short-term investments. They argue that they may need the money in the next few years. For projects, investments, real estate purchases, etc. In reality, often 10 years or more pass with a far too low allocation to equities. We should talk about this.

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