What is the difference between a dividend and a capital gain?

What is the difference between a dividend and a capital gain Introduction: The Two Faces of Investment Returns Hello, fellow investors! When it comes to investing, returns are the ultimate goal. But did you know that there are two primary ways you can earn returns on your investments? They are dividends and capital gains. While they both contribute to your overall profitability, they have distinct characteristics and are generated in different ways. In this video, we'll explore the intricacies of dividends and capital gains, helping you navigate the investment landscape more effectively. Dividends: The Steady Income Stream Let's start with dividends. When you invest in certain stocks, you become a partial owner of the company. As an owner, you're entitled to a share of the company's profits. These profits are often distributed to shareholders in the form of dividends. Dividends can be seen as a regular income stream, similar to receiving a paycheck. They're typically paid out quarterly or annually, and the amount you receive is directly proportional to the number of shares you own. Dividends are particularly attractive to income-focused investors, such as retirees, who rely on these payments to cover their living expenses.