Why you should not save, but invest your money – DailyExpertNews

Nifty crossed 20k last week. Inflation was 6.8% in August. The two statements may seem to have nothing to do with each other, but they are the reasons to invest assets that can beat inflation. If your money doesn’t grow faster than inflation, you’re essentially losing it. Money held in a bank account will lose value over time. Money stored in a safety deposit box will lose value even faster
* Data shows that fixed income and gold returns cannot beat long-term price appreciation
*The only asset class that can consistently beat inflation is stocks, data shows. The only exception is real estate, but that requires large outlays, is highly illiquid and comes with exorbitant entry and exit fees
Equity MFs Best option for Private investors
For private investors, diversified equity funds are the best way to invest in equities. They are easy to invest in, require minimal paperwork and spread the investor’s risk over a block of shares. Experts say equity funds should be the vehicle of choice when investing for long-term goals
Types of Diversified Equity Funds
LARGE-CAP FUNDS invest mainly in shares with a large capitalization. These are stable and generally invest in very large stocks and therefore tend to move with the market. Invest in large cap funds if you want stable returns at relatively lower risk.
MID-CAP FUNDS investing in mid-cap stocks. Their returns are generally higher than large-cap funds because mid-cap stocks have greater growth potential. But this segment is also more volatile. Invest in mid-cap funds if you are looking for growth and can tolerate some risk.
SMALL CAP FUNDS investing in smaller (and generally newer) companies. The risk here is greater because the companies in which these funds invest are smaller and relatively new. But while vulnerable to recessions, small-cap funds have also generated the highest returns for investors.
MULTI-CAP FUNDS invest in a mix of large, mid and small cap stocks. These funds must invest at least 25% of their corpus in each of the three segments. This diversifies the risk.
FLEXI-CAP FUNDS are ‘go anywhere’ funds that can invest in market segments without any restrictions. Experts say flexi-cap funds should be at the core of any long-term investment portfolio.