There is no doubt that investing in the stock market is the best way to stay ahead of inflation in the long term. But high returns bring with it risks. According to a popular study, “90% of investors lose money in the stock market.” So do not invest in the stock market only for the lure of high returns.
Before investing in the stock market, an investor needs to understand the risk associated with it. Equity investment is not like a fixed deposit. The investor earns a fixed interest rate on fixed deposits, but in stocks, the principal amount can both increase and decrease.
If you do not have enough knowledge to invest or you cannot control your emotions, you may lose all your money in the stock market.
But if you believe that you understand the risk of investing in the stock market and have the necessary risk-appetite, then only you should invest in the stock market.