Making Money with Investments

Capital Gains

When you buy a stock, the hope is that the stock price will go up. Why? Because when the stock price goes up, your money grows. This is known as a capital gain.

The opposite of a capital gain is a capital loss, which is when the stock price goes down and your investment becomes less valuable. This is only a problem when the loss is realised.

Realizing a capital gain or capital loss means that you have actually taken the decision to sell your investment. Unless this happens, losses and gains are known as paper losses and paper gains.

Capital gains can occur in the short term or the longer term, which usually depends upon the strategy that the investor has taken. Some investor prefer shorter timeframes, while others are more long term.

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