It’s the time of year we talk about pie. Whether it’s pumpkin, sweet potato, or cherry pie that you might be sharing this holiday season, there’s one slice you could be missing. An entire chapter is devoted to the most important slice of the investment pie in The Coffeehouse Investor book – compounding. It is a piece of the pie that you can’t afford to ignore. We address this topic annually because many investors are still missing this piece!
When you reinvest your stock dividends instead of spending them, you can earn dividends on the original dividends and those dividends earn more dividends and as it continues, you get what we call “compounding.” Investors who spend time selling stocks and mutual funds that go up in price are missing out on the largest piece of the money pie because they don’t give their investments a chance to sit there and do what they are supposed to do – compound!
In celebration of pie, we share our pumpkin pie recipe included in the book. You can now show your loved ones the impact that dividend reinvestment has on your own pumpkin pie.
From our Coffeehouse family to your family, Happy Thanksgiving!