What is the difference between high capital gains vs high dividend yields?

The difference between high capital gains and high dividend yields lies in the nature of the investment returns they represent.

1. Capital Gains: Capital gains refer to the profits realized from the sale of capital assets, such as stocks, real estate, or other long-term investments. These gains are calculated by subtracting the purchase price from the selling price. Capital gains are typically higher when the market value of the asset increases significantly over time, leading to a substantial profit on the sale.

2. Dividend Yields: Dividend yields, on the other hand, represent the returns received from dividend payments made by companies to their shareholders. Dividends are usually distributed on a regular basis, such as monthly, quarterly, or annually. The dividend yield is calculated by dividing the total dividend payments by the market value of the company's stock.

In summary, high capital gains indicate a significant increase in the value of capital assets, while high dividend yields signify a higher return on investment from regular dividend payments. Capital gains are taxed at a lower rate than dividend income, and they can be realized only when the assets are sold, whereas dividend income is received on an ongoing basis.