Capital Growth
The primary goal of any individual is to protect his capital and then grow it. Capital growth is the growth in the value of any asset or investment over a period of time. It is measured by the difference between the current value of an asset and the original investment amount. This Growth can also be termed as capital appreciation.
Risk Appetite
Generally people with low risk appetite prefer to protect their capital. They invest in assets where the returns are safe and low. This protects their capital but might not be enough to withstand inflation. Capital growth is the investment objective of people with moderate or high risk appetite.
Dividend Payout
It has been observed that stocks which generate high growth in capital usually do not pay dividends. As they utilize the profit to generate more money or to reinvest and so offers greater potential to increase the capital growth percentage.
Tax Impact
From taxation point of view, capital growth is different from income. The tax payment can be deferred till they are realized. This is because the realizable value of any asset fluctuates from time to time and until the asset is redeemed, the actual income out of it cannot be determined.
