Most investors focus on capital gains – as this presents the greatest upside potential from a stock investment. As we explain shortly, these two revenue streams can be further amplified through the impact of compound interest. Secondly, you can make money through dividends – which is when companies share some of its profits with stockholders. Firstly, capital gains – which is when you sell your stocks for more than you originally paid. There are two fundamental ways that you can make money when trading and investing on stock apps. We explore the effects of compound interest in more detail below. This is because you will be reinvesting dividend payments back into your chosen index as and when they arrive. Note: If you were to create a long-term dividend reinvestment plan – the financial gains in the above examples would be even higher.
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