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A simple concept, the Capital Gain is when the selling price is higher than the original purchase price. Dividends paid are not taken into consideration.

A Capital Gain is defined as the profit made when an asset is sold, as the selling price was higher than the original purchase price. If the selling price is lower than the original purchase price, this is a capital loss. A Capital Gain could be adjusted for inflation, which means that the original purchase price could be inflated or increased. There is the concept of an unrealised Capital Gains, where it is perceived that the asset, if sold could or should or will command a higher price. Always keep in mind the distinct difference between the two one is fact. The other is hope or perception. Further, a Capital Gain is not the Total Return as Dividends paid out are not taken into consideration.


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Warren William

Meet the author behind Smartest-Data. Warren William has a career in Finance and Investments extending over 35 years, both on the Buy Side and Sell Side. His most recent roles include, developing Institutional Risk Management Programs for managing Equity and Fixed Income Risk.  Prior to this Warren William work in Alternative Investments, in Investment Management and as a Buy Side Equity Analyst. Warren William brings a wealth of knowledge and expertise to the table, providing in-depth analysis and commentary on the latest trends in the Stock Markets. Contact information: or Telegram +393339034488

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