How Do You Earn In The Stock Market?

Can you earn money in stocks? How to make money in the stock market?

Buy stocks as you would groceries:
​when they are on sale.

Christopher Browne

Fundamentally, there are two ways on how to earn money in the stock market.

Price or Capital Appreciation​
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A company's growth and success usually drive its stock price higher. When you buy a stock at a low price and sell at a higher price, the profit becomes a capital gain.

Dividends
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Companies also give out a portion of their profits to shareholders, called dividends. Profits may be in the form of cash, stock or property and is in proportion to the number of shares you own.​

What are the different types of dividends?
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Cash Dividends
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A share of the company's income in the form of cash. This is the most common form of dividend.

Stock Dividends
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Payment made in additional company shares instead of cash dividends. This is usually announced as a percent increase in the number of shares a stockholder may own.

Property Dividends
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​A rarely used form of dividends, shareholders may received physical assets or stocks in a company subsidiary or affiliate.