Compound investing

Ive got 2 quistions.

  1. I use Euro as my account currency, but i only invest in US stocks, will currency rate affect my long term return?

  2. I understand the principles of compound intrest re-investing. But on Trading 212 Invest platform, lets say ive got a investment for 10 years that i do not sell. How will that add more money to the investment? Do i need to when ever being in a large ammount of profit, sell some of my shares, get the profit from that and re-invest the whole ammount into that stock again?

  1. Very little unless one currency completely collapses.

  2. Re-investing dividends, adding more funds. If you sell just to re-buy the same you’re not doing anything other than getting taxed and therefore losing money.

Edit: if you ever do make a huge amount of profit, it can be worth pulling out your original funds to invest in another instrument while leaving the profits in to accumulate and grow, that way you’ve got something for essentially nothing.

Edit edit: the above may or may not be the best. It depends on your strategy. I don’t give financial advice. I just talk sensible.

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Thanks for the quick reply. I get you. So it is just holding on to the stocks, adding more funds, re-investing dividends and then just letting that baby grow like a snow ball down a hill.

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Exactly. Some don’t give dividends and you gain money by the price appreciation. Those are the ones you tend to sell once you need money. Dividend ones you don’t need to sell as they generate cashflow.

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I get you. Cheers mate, cleared out the head :slight_smile: