The Power of Compounding
Many traders take unnecessary risks to make a killing. And they usually end up getting killed.
If these same traders would simply throw a little patience into the equation, they might be shocked at the returns that are possible over time. And with lower risk.
Take a theoretical $10,000 account. Here's the power of compounding over different time periods and with different monthly returns on the $10,000, excluding taxes and commissions:
2 Years | 4 Years | 6 Years | 8 Years | 10 Years | |
2% | $16,084 | $25,870 | $41,611 | $66,929 | $107,651 |
4% | $25,633 | $65,705 | $168,422 | $431,718 | $1,106,625 |
6% | $40,489 | $163,938 | $663,777 | $2,687,590 | $10,881,877 |
8% | $63,411 | $402,105 | $2,549,825 | $16,168,901 | $102,529,929 |
10% | $98,172 | $970,172 | $9,555,938 | $94,123,436 | $927,090,688 |
This is not an offer to sell or buy securities nor is it investment advice. It's simply the mathematics of compounding.