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Compounding Advice

Discussion in 'Beginner's Lounge' started by tylerdurden2019, Jul 7, 2019.

  1. tylerdurden2019

    tylerdurden2019

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    Hi All,

    Newbie here! Looking for some advice on compounding when it comes to share profits and returns. Is this simply a case of reinvesting the profits into winning stocks or am I missing something here?

    Given the banks have poor interest rates assuming compounding on the stock market refers to reinvesting any profits made?

    Thanks
     
  2. tech/a

    tech/a No Ordinary Duck

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    Yes correct
    Also any dividends
     
    Value Collector likes this.
  3. Zaxon

    Zaxon The voice of reason

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    Compounding simply means earning interest on interest. Shares tend to compound inside themselves, so even buy-and-holding shares is a compounding technique. Definitely reinvesting dividends. But not necessarily in the same company. I collect my dividend money, and it gets added to the next share I'm buying.
     
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