GLOSSARY TERM
Capital Appreciation
Capital appreciation means an investment rises in value over time.
What does this mean in practice?
It refers to price growth, not income payments such as dividends or interest. An investment can create return in more than one way: through capital appreciation, through income, or through both together. For many long-term investors, a large part of total return comes from this increase in value.
Example
You buy an ETF for €100 and later it is worth €130. That €30 increase is capital appreciation. If the investment also paid income during that time, that income would be separate from the appreciation itself.
Why it matters
It helps explain that long-term wealth can grow not only through cash income, but also through the rising value of the investments you hold. This makes it easier to understand the full picture of how investing creates growth.
Continue your path
Ready for the next step? Follow the Start Here path.
Go to Start Here