Stock market capital gains are the earnings obtained from operations in financial markets. It is the difference generated between the purchase price and the sale price. However, these gains are gross, not net as some small and medium investors may create. Because in effect, this amount will have to be discounted all commissions and expenses in its management and maintenance that these movements undoubtedly entail. Without forgetting the tax treatment that operations will have and that depending on the characteristics of the taxpayer will have one or another result. Thus, certain items of various kinds will have to be discounted from the capital gains generated in the equity markets.
In any case, it is the goal to which all investors aspire, without exception. And the larger the capital gains, the better for your personal interests. Whatever the term to which your investments are directed: short, medium or long. Like the profile you present as a retailer, that is, aggressive, intermediate or conservative. All paths in investing lead to earning money. In this sense, there are no possible shortcuts and it is part of a powerful strategy to increase your personal or family assets.
Within this general context, it is true that on many occasions you do not know what to do with capital gains and even if it is strange it can cause you some other problem in managing your savings. Beyond other technical considerations and even from the fundamental point of view presented by the equity markets. Not surprisingly, it is very important to manage capital gains and for this these tips that we are going to expose below are aimed at. So that in this way, you are in the best of dispositions to raise your checking account balance from now on. Which is at the end of the day what it is, as you well know.
Capital gains: reinvesting them in the stock market
A first strategy that you can apply from now on is the most original of all and may also be very aggressive. It basically consists of these profits being part of the new capital for investment. So that in this way, you can increase your ability to generate profits in the buying and selling shares on the stock market. This action can be carried out in many ways and one of them is based on investing the capital gains in new investments. It is true that you will not enjoy the profits, but in return you will have a much better chance of increasing your personal assets.
Another of the strategies that you can use from this moment on is to stay in your positions. Namely, do not sell the shares so you can keep increasing your earnings even more. However, this system carries some latent risk and one of the most accused is that luck may change at any time. To the point that the trend turns and you even go to the opposite situation, that is, you lose money. In any case, it is a risk that you have to run by adopting such an aggressive investor profile. Although in the long term, you will surely be victorious in this confrontation that you have against the financial markets.
Enjoy profits quickly
Anyway, the simplest solution you have on hand is to sell the shares. to a good change so you can enjoy the capital gains. Giving yourself a little whim, taking a trip abroad or simply satisfying your consumer desires. The advantage of this strategy is that it will always be tangible or what is the same you will have a reward for your investment task. Not surprisingly, it is the most common aptitude for small and medium investors and beyond other considerations. Because at the end of the day money is to enjoy and the bag is an instrument to effectively achieve these desired desires.
On the other hand, you cannot forget anywhere to sell the shares at the best possible exchange rate in the financial markets. This is achieved by making sales with a price given by you, the one that best interests you at all times. Above the so-called market prices that always limit the operation, as you yourself know. Not surprisingly, it is a way to rush capital gains a little more. Especially when it comes to operations carried out in a very short space of time. Where the difference between the purchase price and the sale price is almost always lower.
Take an intermediate position
In the stock market, not everything is black and white but there is a wide range of shades that you can use to manage the capital gains obtained in the equity markets. Among them, one of the common ones is the one that refers to distributing the profits equitably to the previously exposed strategies. That is, you can dedicate half the amount for your personal whims or even to raise your monetary support. While the remaining part can be used to continue in the investment sector to try to continue tempting luck and get more capital gains.
One of the advantages that this special strategy gives you is that you can always keep the two approaches previously expressed. In the percentages that you yourself consider most appropriate at all times. To the point that you can risk your profits more in periods when the general trend of the stock market is clearly bullish. In this way, you do not doubt that you will have more possibilities to take more money in the financial markets. Although in these specific cases, it will be you who must make the decision on how you will have to distribute the money from now on.
Dividends that are invested
One of the most characteristic examples of this trend in the investment sector is representing by the distribution of dividends. You cannot forget that this shareholder remuneration is not always paid in cash. Because on the contrary, you can be directed to boost your investment through new actions. This is what more and more companies that are listed on the benchmark index of the Spanish stock market, the Ibex 35, are doing. well defined: conservative person who wants to take his investments to the medium and long term.
In this way, the immediate effect of this management system is that from that moment on, the investment capital will be much higher than before. Not surprisingly, you will have more shares as a result of the application of these special dividends. Listed as Iberdrola, Repsol or some of the big banks do it with some frequency every year. Thus, in the first moment you will not have that money instantly in your checking account. If not, on the contrary, you will have to wait longer to recover it, although perhaps with a higher volume of money.
Change financial product
On the other hand, you can also use the capital gains to invest in other financial or even banking products. For example, time deposits, investment funds, sovereign or structured bonds. It will be a very original way to start again, that is to say from scratch. With new objectives to be achieved with these operations. It is a mixed model in which a good part of the small and medium investors fall. It is neither better nor worse than the previous ones, but on the contrary it is an optional alternative that you have depending on the risk you want to assume from now on. You can lean towards equities, but also fixed income or even from merely alternative or unusual approaches to your investments.
In any case, the choice of this option what will not allow you to enjoy the capital gains, just as your closest wish could be. If not, on the contrary, you will continue to be linked to the investment sector, in one sense or another, depending on the financial asset chosen at the end. This is what many people do to avoid having their money stopped in no time. If they do not try to do so, it is to continue looking for greater profitability for their money, something on the other hand very logical.
In any case, the solution that carries less risk is to direct that amount to a fixed income product that generates a small annual return and no matter how small it may be. Around 1% or 2%, as a result of cheaper money by the issuing body of community institutions. Of course, it is something that you can consider from this moment without risking your earnings. So that in this way, you do not risk at all the volume of the profits you have obtained in the equity markets. Not only on the stock market, but through other financial products from equities in their broadest investment formats.