THE BEECHMONT CREST ONLINE GUIDE TO STOCKS AND INVESTING
CAPITAL GAIN STRATEGY
-The strategy of purchasing a riskier security that pays no dividends, with the expectation that it will increase in value in the short- to mid-term. The security is then sold for a profit.
- The difference between the buying and the selling price (or the profit realized from selling the security at a higher price) is called a capital gain.
- The capital gain strategy requires more risk tolerance and knowledge of the market; but it can result in greater wealth than the buy and hold strategy.
- The capital gain strategy is also called active investing.