What is capital appreciation?
One way of making money through stocks is capital appreciation. A week later if the stock price of the scrip you hold has doubled to Rs.20, by selling it you have earned a return of Rs.10 as capital appreciation. You have made money by a 100% appreciation in the stocks price. Through this way your fortunes will perpetually keep fluctuating. Thats because it depends on the stocks price, which is always on the move even if fluctuations are incremental. Chances are most of the times your invested capital is getting appreciated but the value could also dip.
Capital appreciation refers to the amount of increase found in the principal value or the price per unit of a share of stock. This increase is often a demonstrable appreciation in value, based on verifiable historical data. In other applications, a capital appreciation may be a projection of the rate of increase in value that is anticipated over a given period of time. The potential for a stock to generate capital appreciation is an important factor when an investor is interested in creating a component of the financial portfolio that is focused on long-term growth. Within the approach, there is a need to secure stocks that are available at an equitable asset price, but where there is reasonable potential for an increase in market price over an extended period of time. Identifying these types of investments can usually be achieved by conducting a historical analysis on a potential acquisition. The potential asset will be evaluated for stability and the rate of increase in price it has
