what are the two ways that investors can mak...
Investors generally make money from stocks in two main ways:
- Capital appreciation (price increase)
- You buy a stock at one price and later sell it at a higher price.
* Example: If you buy a share for 50 and later sell it for 80, you earn a 30 profit (before taxes and fees).
- Dividends (cash payouts from profits)
- Some companies share a portion of their profits with shareholders as regular cash payments called dividends.
* You can take this as income or reinvest it to buy more shares and grow your holdings over time.
So, if a question asks “what are the two ways that investors can make money from stocks?”, the expected answer is: through capital gains (stock price going up) and through dividends.
TL;DR:
Investors profit from stocks by selling them for more than they paid
(capital appreciation) and by collecting dividends that companies pay
out from their profits.
Information gathered from public forums or data available on the internet and portrayed here.