What is the difference between capital appreciation and income?

Investors who prioritize income are often seeking financial stability, especially during retirement. On the other hand, capital appreciation is all about growing the initial investment over time. This strategy aims for the value of the investment to increase, usually through price appreciation.

What is capital appreciation & why is it important?

This income can come from various sources, such as dividends from stocks, interest from bonds, or rental income from real estate. Investors who prioritize income are often seeking financial stability, especially during retirement. On the other hand, capital appreciation is all about growing the initial investment over time.

What is the difference between capital appreciation and capital gains?

Though the terms are sometimes used interchangeably, there is a difference between capital appreciation and capital gains. Capital appreciation occurs when the value of an investment rises above the purchase price while the investor owns the asset. In contrast, capital gains are the profit made once an investment is sold.