What is Capital Growth?

The principle of capital growth is one of the basic principles that should be followed in constructing a securities portfolio. It means that investors should take capital growth as an ideal goal when constructing a securities portfolio. This does not necessarily mean investing in growth stocks. The portfolio can be grown either by buying growth stocks or by reinvesting earnings. Large portfolios are more stable, safer, and generate more income than small ones. Capital growth is beneficial to improving the position of portfolios, maintaining purchasing power, and enhancing management flexibility.

Capital growth principle

Right!

The principle of capital growth is one of the basic principles that should be followed in constructing a securities portfolio. It means that investors should take capital growth as an ideal goal when constructing a securities portfolio. This does not necessarily mean investing in growth stocks. The portfolio can be grown either by buying growth stocks or by reinvesting earnings. Large portfolios are more stable, safer, and generate more income than small ones. Capital growth is beneficial to improving the position of portfolios, maintaining purchasing power, and enhancing management flexibility.