Investing term

What is Capital gain?

The profit from selling an investment for more than you paid.

A capital gain is the profit you make when you sell an investment for more than you paid. It's only "realized" — and usually taxable — when you actually sell; until then it's a paper gain that can still evaporate. In many countries, gains on assets held longer are taxed more lightly, rewarding patience.

For example

Buy a share at $40, sell at $70, and the $30 difference is your capital gain — taxable in the year you sell, not while you hold.

Capital gain is taught hands-on in Stage 4 — Stocks, Bonds, Cash & Alternatives.

See the lesson →

Related terms

AlternativesInvestments outside the core stocks/bonds/cash mix — REITs, commodities, gold, crypto.BondA loan from you to an issuer (government or company), repaid with interest on a known schedule.CommodityA raw physical good like gold, oil, wheat, or copper — priced by the ounce, barrel, or bushel.CorrelationHow tightly two investments tend to move together, measured from +1 (identical moves) to −1 (opposite moves).
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