What Payments To Expect
As an investor, you will either get money from Capital Appreciation or Dividends.
- Capital Appreciation
Where you leave your stocks alone and sell them when prices have gone up. All the profits are reinvested back into the company. - Dividends
Payments from companies that have made a profit. Large companies who are doing well will share out part of the profit to each of its shareholders in the form of a dividend. Normally, there is a fixed rate of money per share, for example, a cent per share.
Most companies choose to invest the profits back into the company to help it grow. The basic general rule to keep in mind is that larger companies tend to pay out dividends, while smaller companies will reinvest.
Growth Stocks are shares in companies that reinvest their profits. Income stocks are shares in companies that pay dividends and that provide an income.
