Dividends and capital appreciation are the two potential avenues for a stockholder to profit. As a result, the dividend is one of the possible methods.
When you sell an investment at a higher price than when you bought it, you earn a capital gain. When an investment is sold for a profit, the investor realizes a capital gain.
Dividends, on the other hand, are assets distributed to stockholders from a company's profits. Dividends have a lower tax burden than capital gains since they are often low in income. In the long run, this means dividends are a better tax choice.
Taxes on capital gains vary depending on whether your investment is short or long term.
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