The answer is both.
Your child reading out loud is beneficial for many reasons.
- It is helping them practice fluency (the ability to read out loud with appropriate pacing and inflections).
- Listening allows to identify and think about the word sound they are having trouble decoding. If you notice a difficulty with a long a, or blend (ch, sh wh) you can google activities or find worksheets.
- It allows them to focus on comprehension and major events of the story.
- They are able to enjoy reading on a different level and engage in more complicated and interesting stories or text.