The average 'saver' is not investing in the stock market, he is selling his fiat and hoarding stock. He is trying to retain value for his retirement against a devaluing currency but contributing very little to innovation through his purchase.
Still saving by hoarding goods is better than hoarding money, because the funds go to the producers who can reinvest it.
The flaw of the current system is that it invests more than it saves. But saving and not investing doesn't cause growth. It doesn't creates more means of production. Deflation encourages saving but discourages investing. That's what is wrong with deflation.