An investor can best harness the power of compounding by doing all of the following, EXCEPT…

Un inversor puede aprovechar mejor el poder de la capitalización compuesta haciendo todo lo siguiente, EXCEPTO…

A.
Making frequent trades---Realizar intercambios frecuentes

B.
Starting to invest early---Empezar a invertir temprano

C.
Reinvesting earnings---Empezar a invertir temprano

D.
Minimizing risk---Minimizar el riesgo

1 answer

An investor can best harness the power of compounding by doing all of the following, EXCEPT…

A. Making frequent trades—Realizar intercambios frecuentes

Frequent trading can actually be detrimental to compounding, as it often incurs transaction fees and may lead to lower overall returns compared to a long-term buy-and-hold strategy that allows investments to grow over time. The other options (B, C, and D) directly contribute to maximizing the benefits of compounding.