Profiting (capital and dividends)
How does one make a profit on the stock market?
There two ways for an investor to make a profit in the stock market. One way is to buy a stock and then sell it at a higher price. This is called capital appreciation. The second way is to receive dividends, which many companies pay twice a year from their profits.
Typically, an investor will profit from both of these, although dividends are often not taken seriously. The reason for this is that the first few dividend payments are fairly small, equalling a percent or three of the actual share price. However, dividends can start to become significant within five or ten years, relative to the price paid for the share.