Returns

Introduction

Returns in this context refers to the (monetary) gains you will get by investing in stocks.

By putting it simply, below is a brief explanation on the 2 different types of returns.

1) Cash dividends:

Cash dividends are part of a company’s after-tax earnings that the management or board of directors of a company decides, usually quarterly, to be distributed to the shareholders. However, these dividends are not guaranteed and are solely decided by the company’s management.

2) Capital gains:

Capital gains are the profits made from an increase in the market value of the securities. In other words, the profit that results when the proceeds from the sale of a stock are higher than the stock’s cost basis.