Returns from investments in shares or stock market come in two forms- capital appreciation and dividends. Capital appreciation takes place when there is and increase in the price of your shares. For example, if you buy 100 shares of XYZ Ltd. Rs. 1,000 and later sell them for Rs. 1,800, there is a capital appreciation of Rs. 800 or 80 per cent. This is also referred to as capital gains or capital appreciation.
When you invest in shares, your capital grows quickly-much faster than in most other forms of investment. Sometimes the growth can be spectacular, going even as high as 1,000 per cent per annum. People are attracted to shares precisely because they offer exciting possibilities of getting rich.