Everyone would love to invest when equity prices are low and sell when prices are high; that would be ideal. This notion of buying low and selling high is known as “timing the market”. However, more often than not, investors that attempt to do so miss out by remaining uninvested for too long as they sit on the sidelines and wait for prices to drop before they invest again. During that time, not only do they miss out from possible advances in prices but more importantly from the benefits of compound interest.

So what is compound interest?