capital-appreciation

Vocabulary Word

Definition

'Capital appreciation' is the rise in value of an investment or asset over time. This is different than earning money through dividends or interest, it's simply the value of what you own increasing.

Examples in Different Contexts

In wealth management, 'capital appreciation' aims to grow the client's portfolio value. A wealth manager might explain, 'Our strategy focuses on long-term capital appreciation through a diversified investment approach.'

Practice Scenarios

Wealth Management

Scenario:

Considering your long-term financial goals, we need to think about balancing income generation with growth of your principal investment.

Response:

I agree, a balanced approach towards income and capital appreciation will maximize our investment's potential.

Real Estate

Scenario:

The upcoming development plans for the neighborhood should make the area more desirable and potentially increase property value.

Response:

Our investment in the area has already shown signs of capital appreciation. The coming development work should contribute further.