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July 11, 2025

The power of compounding

Good morning,

 

If your great-grandparents had invested just 1 USD in US equities in 1900 and let it compound — without touching it — that single dollar would be worth 107,409 USD today.

The chart says it all. Equities returned 9.7% per year, while bonds and bills delivered much lower compounded results: 268 USD and 67 USD respectively. Cash barely kept up with inflation.

This is the power of compounding — what Albert Einstein allegedly called the eighth wonder of the world. Whether he said it or not, the math speaks for itself.

At ECP, we don’t try to time markets. We stay invested in quality businesses with strong fundamentals and give compounding the time it needs to work. Because in the end, patient long-term investing wins.

 

Have a great day,

Léon

 

PS: Chart brought by Ignacio Ramirez Moreno on Linkedin

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