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Investing in the stock market to make your money grow

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idigitalpreneur
Investing in the stock market to make your money grow

This is usually the main reason why you want to start investing in the stock market: nothing more and nothing less than to make money.


By investing correctly, you have the opportunity to "grow your capital", that is, simply to make your money work for you.


And be careful: we are not talking about "playing on the stock market", and having fun betting on individual stocks, but about setting up a long-term investment strategy.


The expert trader and the specialist provide online stock market courses explained two main ways. Those are capital gains or dividends to make money by investing,


Capital gains & dividends

  • Capital gain is the difference between the purchase price and the resale price of an asset such as a stock on the stock exchange. If you buy, for example, an Apple stock, it is hoping later to be able to sell it for more than you had bought it – and therefore make a capital gain.


  • Dividends are a form of income paid by the company to its shareholders (those who own shares in that company). It is a sum of money that is taken either from the profits or from the reserves of this company. Concretely, you will receive periodically (often annually or quarterly) a sum of money proportional to the number of shares you own in the company in question. Be careful: not all companies pay dividends, nor are they systematic.


Which is better: dividend or capital gain?


Naturally, according to online stock market courseswe can directly say that we would prefer to receive dividends regularly rather than receive a capital gain only on resale. But it's not necessarily that simple.


As we told you above, not all stocks, funds, or ETFs pay dividends.


Companies that pay dividends are generally large companies with large profits.

This also means that they are often well-developed companies whose growth is slower. But that doesn't mean you won't add value either.


In the case of an investment strategy based on capital gains, it is then possible to invest in companies with more interesting growth potential.


These companies usually pay little or no dividends, precisely because they want to devote their profits to their growth objectives.


So you have the opportunity to have interesting performances in the long term.

In any case, it is important to choose a strategy that matches your profile and your goal as an investor.


And to know that the best way to grow your money is to reinvest your dividends rather than cash them in.



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