Final answer:
The worst asset for a long-term investor concerned with inflation and growth has historically been Treasury bills, which offer lower returns compared to stocks and equity mutual funds that typically provide higher average returns due to their higher risk and potential for significant growth.
Step-by-step explanation:
Historically, the worst asset for a long-term investor to fend off the threat of inflation while making his money grow has been Treasury bills. Treasury bills, or T-Bills, are short-term loans with maturities of 13, 26, or 52 weeks and are seen as very safe due to government backing, but they offer lower returns than other investments. Over time, stocks and equity mutual funds tend to outperform government bonds, corporate bonds, and T-Bills, especially in the long term where they offer the potential for significant capital growth that can outpace inflation.
Assets like stocks and equity mutual funds typically offer higher average returns compared to bonds and T-Bills. This is because stocks are inherently riskier, possessing the potential for large growth or decline in value. The increased risk associated with stocks and mutual funds generally comes with higher expected returns, which can be more effective at outpacing inflation over the long run.