Why must we invest?

Investing is the counter balance to inflation. Currently, inflation stands at an average of 3% per year. We can’t deny or avoid it: Our money is shrinking with each passing year when it is left idle in the bank. Of course we must diversify, so we should put some money in fixed deposits and bond funds. But the real money grower is equities, because they have much upside potential. In the long term, and I look at a time horizon of 20 to 30 years, equities will appreciate. Think of your money invested in equities like a girl with a yo-yo riding on an upward bound escalator. Yes, the stock market will go up and down like a yo-yo and there will be volatility with the extreme swings and all, but in the light of the bigger picture, the escalator is upward bound, so your money will also grow.

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