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4 Investments

Returns from investment

There are two types of returns you can receive from investments.

These are income and changes in capital value. Ideally, your investment might appreciate in capital (make a capital gain).

However where the current value is less than the purchase price, this creates a capital loss.

Some assets only provide income as the return, for example, a bank account.

Some investments only provide a capital gain or loss, such as vacant land.

There are also investments that provide a return from both income and capital.

The possible types of return that could be received from different asset classes are shown in the table.

*Technically, this is known as the coupon rate or sometimes simply the yield.
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