If I pull my money each year from S&P index fund, whenever there is a profit and deposit back the money along with profit. Wouldn't I have compound interest and a lot of money, so why don't people talk about it or say it's recommended to put those money in long term.
Now say, I put in 1000 $ and kept it there for 20 years. I would earn a significant return but if I withdraw the money every month, whenever I could get a profit or let's say get more than 1000$ and put them back in, I would have base value greater than 1000$ and the time difference between pulling out and pulling in back is negligible as it's one day only. So the return with this strategy should be greater right or there's something I don't understand? I heard that you can pull out anytime. So is there something I am missing?
One thing I get is that there would be a tax associated with pulling out and also returning it back in, which could also lower the value. Or they put into account the compound nature of the whole deal already, over which long term investment is the best. Another potential reason might be that there are some downsides involved when you try to sell your stock.
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