Are stock market really compound interest?

[Wid]

I just realized that Stock is only compound in value but your money only appreciate in value. The compounding machine only works on "interest on interest" or "earning on earning" (ex : dividend reinvestment), That means you must sell your stock first and moved that profit to another good stock investment, which that means investing regulary every month into s&p500 or a Mutual Fund based on "Compound Interest Calculator" is a blatantly a lie.

MJ right, Compound interest became very efficient when you already had large amount money already invested.

Glad i know this early...

 

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[ravn]

While stocks don't offer compound interest in the traditional sense, they can experience compounding growth through reinvesting dividends or capital gains, which can lead to exponential value growth over time. You should have realistic expectations and understand that the power of compounding becomes more pronounced with larger investments.