Capital-gaining

Capital-gaining refers to the financial outcome resulting from an increase in the value of a capital asset, such as stocks, bonds, real estate, or collectibles, when it is sold for a price higher than its original purchase price. This gain represents the profit realized by the investor or owner. Tax implications, such as capital gains tax, often apply to capital gains, impacting the net financial benefit. The term highlights the active process of investment with the primary objective of generating financial returns through asset appreciation, and not necessarily associated with generating ongoing income.

Capital-gaining meaning with examples

• After holding the tech stock for five years, the investor decided to sell, realizing a significant capital-gaining on their initial investment. The profits allowed them to diversify their portfolio further, spreading risk across various asset classes.
• A successful property developer oversaw the refurbishment of a neglected area. They later sold it at a capital-gaining which transformed the area economically and created substantial wealth through strategic investment. The capital earned went to further investment projects.
• During an era of economic inflation, a collector cashed out their rare art pieces at a considerable capital-gaining. They were able to fund their retirement years with the returns gained, and enjoy the fruits of patience.
• The bond market fluctuation allowed for opportunistic trades. Skilled investors could quickly identify under-valued bond assets, buy them, and sell them shortly after at a noticeable capital-gaining, based on shifts in interest rates.
• Investing in a company's initial public offering (IPO) often carries the potential of a capital-gaining if the company performs well and the shares appreciate in value. This is a popular strategy in investment.