What is capital gain?
Capital gain refers to the expected profit of the investment, as well as internal gain. Do not take sides, it is important to target investments in a balanced manner on the basis of a good understanding of their respective characteristics.
After introducing the benefits of capital gain and income gain, this paper also introduces the relationship with taxation.
Two kinds of interests in Stock Investment
There are two kinds of profits in stock investment: capital gain and income gain. The capital gain in stock investment is the profit obtained from the sale of shares, and the income refers to the income earned periodically by holding stocks, such as dividends.
By the way, the shareholder concessions such as the company's goods and services given by the invested enterprise to the shareholders are a kind of income gain. For more information about shareholder discounts, please refer to the following article.
What is capital gain?
Capital gains refer to the transaction gains from the sale of assets held. English capital (Capital) means to acquire capital, capital, and Gain.
Capital gains are not only limited to stock investments but also expected profits on occasions such as financial management and real estate investment. Here, we will discuss specific examples of capital gains in each investment, as well as people who are suitable for investment capital gains.
Specific examples of capital gains in each investment
Capital gains in stock investments and investment trusts refer to the profits made when held stocks and funds are sold at a higher price than at the time of purchase. If you sell shares bought at 200000 yen for 300000 yen, you will get a capital gain of 100000 yen.
The capital gain in real estate investment refers to the profit from the sale of real estate such as land and apartments when the price goes up.
It is worth mentioning that the loss caused by selling at a price lower than the time of purchase is a loss of capital.
People who fit the goal of capital gain
Investment focusing on capital gains, on the one hand, can expect larger sales gains, on the other hand, it may also lead to huge losses. Therefore, this is an approach to asset management for people with high-risk tolerance and high profitability.
In order to determine more specifically whether we are suitable for the capital gain goal, we will introduce the advantages and disadvantages respectively.
Advantages of the capital gain target
One of the benefits of the capital gain target is that it can make a profit in a short period of time. Even if it starts with less capital, due to the rapid changes in the social situation and other reasons, you can make a profit in just a few days after the start of the investment.
The advantage of the capital gain target is that greater profits can be expected. If you buy the underlying asset when it is cheap and sell it after the price goes up, sometimes you can get several times the profit on your investment.
Shortcomings of the capital gain target
There is no capital gain unless the price of the assets held goes up. Although capital gains are targeted, a fall in asset prices will lead to capital losses, which is a drawback.
In addition, even if the price of the held asset rises, there will be no capital gain unless it is decided to sell. It can also be said to be a drawback that prices may fall unwittingly because of the postponement of the sale in order to make more profits.
Source: TSE Money-Bu