Written by Tony Dong, MSc, CETF® at The Motley Fool Canada
For many new investors, the journey towards building wealth can often start with a sense of disappointment.
When they learn that investing in broad stock market indexes like CRSP U.S. Total Stock Market Index or the S&P 500 Index typically yields a 7-10% annualized return, it might not seem like a path to riches.
In a world where instant gratification is often the norm, these returns can appear modest, leading some to seek out more speculative, get-rich-quick opportunities in meme stocks, penny stocks, and cryptocurrencies.
However, this perspective is short-sighted. The true power in investing doesn’t lie in chasing the next big thing but in understanding and harnessing the power of compounding, especially when time is on your side.
Compounding, coupled with consistent investments, reinvested dividends, and disciplined strategy, can turn even modest…
