I know that babies can learn phonics from sight reading many words, but today my little girl really surprised me. She has a reading vocabulary of about 100 words though I have only ever seen evidence that she can read about five or six of the words I have shown her. If she can read 100 words then she can read more than she can speak (her spoken vocabulary is nearing 60 words at the moment)
Today I had some word flashcards on a table to cover in contact as I was catching up on making a few more while my daughter napped. She woke up while I was still busy and I took her to the room I was in. She picked up a card and said “boy” which was what the card said. I had never shown it to her before, she has never said the word boy before in her life and I don’t think she even truely knows what a “boy” is, but it seems she can read it - I know she knows how to read the word “toy” and she knows a good many words that start with a “b” but could she really be reading phonetically this early? And if she is, then what am I supposed to be doing about teaching her further?
My son is 2 and I believe he has a strong reading vocabulary and have heard him say some words out of the blue that make me wonder… but I know he loves reading and thats what I want… to make sure its always fun. Right now at two I m reading him classics… pollyanna, heidi and he loves it and it so cute to har what he likes about the story its very dfferent from what we think is great!!! He sits through about 50 pages per night… we introduced him to longer stories and we read it to him whenever he askes… I stop reading when I get tired… and he loves it. We have a lot of fun… and it really increases his vocabulary and his use of questioning of things like freckles from polyanna. 
and hes happy to have carpet “a little bit” in his room like pollyanna