This equation also assumes a 9 percent return. The Power of Compounding Sometimes, parents delay college investments because of other expenses, such as mortgage payments. However, thanks to the power of compounding, even small amounts add up over time. Of course, the more you invest, the more you ll accumulate. Stocks A stock is a security that represents ownership in a corporation.
Companies issue stock to access capital for growth.
As a stockholder, you may participate in the company s growth potential. Stocks are issued by large, medium and small companies. Stocks of large companies usually are the most stable. Small cap stocks, by contrast, offer the greatest potential for high returns, but carry the most risk. Stocks from medium-sized companies fall somewhere in between.