Dividends are a portion of a company's profits that are paid out to shareholders. Companies typically pay dividends quarterly, and the amount of the dividend is determined by the company's board of directors. Capital gains, on the other hand, are the profits made when an investor sells their shares for a higher price than they paid for them.
While investing in the stock market can be an excellent way to build wealth over the long term, it's not without risks. The value of stocks can fluctuate dramatically, and investors can lose money if they sell their shares at a lower price than they bought them for. However, with a long-term investment strategy, investors can mitigate this risk and potentially earn significant returns.