Compounding is more than maths

Recently, a reader sent me a thoughtful criticism I'd like to share: "Please stop using the term 'compounding' when it pertains to market investments like equity. 'Compounding' implies a rate of interest that ensures that the investment will grow at a fixed rate YoY. There is no such assurance in the market; your investments may grow by 5 per cent, 10 per cent or even lose 5 per cent. Calling this a 'compounding' effect is misleading the reader."