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Investing Books / Rule Breakers, Rule Makers
|Subject: RMs vs. Compounding||Date: 9/21/2000 2:30 AM|
|Author: neuronnorth||Number: 245 of 265|
As a relatively new investor and Fool, I've been teaching my teenage son about some of the lessons learned on TMF Boards. Reading Rich McCaffrey's essay on "Focusing on the Best" yesterday, I note his comment
"Overall, however, I
expect to beat the market by a few percentage points, and for
those gains to compound handsomely without the high costs of
I had told my son that RM investing doesn't capture the value of compounding interest or value in the same way a high-yield savings account would. But Rich's statement must imply it can, although I don't understand how.
Can anyone explain: how does RM investing encourage the advantages of compound interest gains that we older folks used to hear about as the path to wealth?
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