It’s why you’re interested in the stock market after all! Let’s talk about the two main ways of profiting from investing:
Most investments’ prices fluctuate due to supply and demand which is driven by performance, market conditions and the economy. For example, if you buy shares in a company which subsequently performs well, its share price is likely to rise due to more investors becoming interested. Your shares should then be worth more should you choose to sell them.
Depending on what type of investment you choose, income can come from a variety of sources. For example, when companies make profits, many retain a portion to reinvest in their businesses and pay out the remainder to shareholders as dividends. These payments are usually quarterly or six-monthly.