Compounding
Market basicsGrowth applied to a base that includes previous growth.
In plain terms
It only works if the next rupee earns a good return too — which is what ROIIC measures.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Cost of delay
Risk & psychologyThe compounding lost by postponing a decision.
In plain terms
Invisible, which is why it is tolerated. Two years of a ₹20,000 SIP not started is roughly ₹35 lakh of final corpus over twenty years.
Effective interest rate
Market basicsThe true annual cost of borrowing once compounding, fees and the repayment schedule are counted.
In plain terms
The number on the loan document is often not what you pay. A "no-cost EMI" usually hides the discount you did not get.
Chart distortion
Technical analysisA misleading visual impression created by the choice of axis, scale or window.
In plain terms
On a linear axis, steady compounding always looks like a bubble forming at the right edge — which has talked more people out of good holdings than any analysis.
ROIIC
Fundamental analysisAlso called: Return on incremental capital, Incremental ROCE
Return on incremental invested capital — profit growth divided by the capital added to produce it.
In plain terms
Historic ROCE describes the past. This describes whether compounding is still available.