Dividends paying vs Capital gain stocks

Dividend-paying stocks are stocks that pay out a portion of their earnings to shareholders in the form of dividends. These dividends can be paid on a regular basis, such as quarterly or annually, and are typically paid in cash.

For example, let's say you own 100 shares of a company that pays a quarterly dividend of $0.50 per share. If the company pays dividends on a quarterly basis, you would receive a total of 100 * $0.50 = $50 in dividends each quarter. Over the course of a year, you would receive a total of 4 * $50 = $200 in dividends.

On the other hand, capital gain stocks are stocks that increase in value over time, and the value of your investment increases as the price of the stock goes up. This increase in value is known as a capital gain.

For example, let's say you purchase 100 shares of a company at $50 per share for a total investment of $5,000. If the price of the stock increases to $60 per share, the value of your investment would increase to 100 * $60 = $6,000, resulting in a capital gain of $6,000 - $5,000 = $1,000.

Both dividend-paying stocks and capital gain stocks can be good investments, and the right choice for you will depend on your investment goals and risk tolerance. Some investors prefer dividend-paying stocks because they provide a steady stream of income, while others prefer capital gain stocks because they have the potential for larger returns over the long term. It's important to consider your personal financial situation and investment goals when deciding which type of stock to invest in.