Returns

What are capital gains?

Capital gain is the amount of money which you make when you are investing. For instance, if you invested a thousand pounds and then a year later you sold the shares at a value of fifteen hundred pounds, you would have a profit of five hundred pounds. This is a capital gain. Unfortunately, we have to pay a gains tax. There is a yearly allowance which The Revenue allows you, which does vary over time. What will happen is that you will list your gains and losses on your tax return at the end of the year and The Revenue will advise you whether or not you have gains tax to pay.

What is a dividend?

A dividend is the income that a share pays to an individual. It is declared by the company, and is normally regarded as a percentage of the share price. There are normally two dividends a year: an interim, which is usually the smallest, and then a final dividend. The dividend, when added together for the year, is regarded as the yield for that share.

What is a dividend yield?

A dividend yield is the percentage return on a share price. For instance, if you have a share trading at 10p and the company declares a total dividend of 10p per annum, then that will be trading on a yield of 10 percent.

Am I able to make a quick profit by buying and selling shares?

You can make quick profits by buying and selling shares, but also remember you can make losses. Nothing is guaranteed in the stock market. You can research a company, decide that it's the right company for you, buy them, find that the company has turned in very good results on a particular day, see the share price rise, only to find that the announcement comes to say the interests rates are going to rise by one percent and your shares fall back dramatically. Nothing is ever certain for short stocks and shares.