I've always heard about compounding investing and while I can understand it with say a high interest savings account where say you put $100 in and you get 10% interest in one year and then reinvest that at $110 at another 10% it grows to $121 (compared to just $100 and getting 20% over two years).
But if say I buy $100 of apple stock and it grows 20% in two years and it's valued at $120. How is that compound investing? It's not like I'm buying apple stock getting $110 at the end of the year and reinvesting it in apple again and then getting $121 and repeating. No usually you just buy and you buy that ends up being $120. So I'm just confused on how the whole compounding works for stocks (let's also say there's no dividends to reinvest either)
Submitted May 19, 2024 at 02:31AM by tempestlight https://ift.tt/sHTKkw9
