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What is compounding?
Simply put, compounding is interest earning interest. Over time, compounding can create a sizable difference in an investment's growth, as this chart shows.
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How's it done?
Simply by reinvesting your mutual fund distributions (the earnings that your mutual fund generates). When you reinvest your distributions, you have more earnings available to compound over time.
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For more information - consult a financial professional
For more information about how to reinvest your distributions and take advantage of compounding, make an appointment with a financial professional today.
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| Rates of return are hypothetical, before taxes, assume no withdrawals, and do not represent any particular investment. Returns are compounded quarterly. These figures are calculated on a fixed interest rate and assume no fluctuation in the value of principal. This illustration is not a projection of investment results nor indicative of what an investment in a First American mutual fund can produce over time. |
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