A reader asked a investing question; “how do you make profit from investing in the stock market?”. This is an interesting question since we would like to share how does investors get rich through investing in the stock market. Successful investors don’t just put money, they earned profits from the money they invests in.
Stock market investing is interesting. Nowadays, you can start investing in the stock market via online brokerage account. But the question remain simple, how does stock market works and how can you make it profitable.
How Do You Make Profit from Investing in the Stock Market?
You can earn in two different ways when you invest money in stocks. First is through capital gains and second is by dividends. To know more about the two, read what is a capital gains and what is a dividend all about.
Assuming you invest money in the stock market worth $10,000. You bought ABCDEF stock worth $10,000. After few months the ABCDEF stock price increased. The market value of your stock is $10,870. Therefore, the $870 is your profit. That is the simple explanation of capital gains.
Aside from capital gains, you will also earn dividends. Assuming the ABCDEF stock is releasing dividends of $1. if you have 100 stocks, you will receive $100.