EARNINGS ARE INTEREST, DIVIDENDS, AND CAPITAL GAINS
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Our discussion of the different kinds of investment should help you identify the different ways in which income is paid out to investors. You should also be aware of the differences between income generated from stock investments and income generated from bond investments. Finally, you should have an understanding of how investment earnings are taxed and what implications that has for the investor.
Earnings exist as interest, dividends, and capital gains. Different investors will have their own preferences for how they want to receive their income. They should target those investments that have the earnings characteristics that they desire.
For more information about investing in stocks and bonds, check out other tutorials in the Stocks and Bonds categories. Click here to learn even more about this topic with the Encyclopedia of Personal Finance™