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Capital appreciation is an increase in the price or value ofassets.[1] It may refer to appreciation of companystocks orbonds held by an investor, an increase inland valuation,[2] or other upwardrevaluation of fixed assets.
Capital appreciation may occur passively and gradually, without the investor taking any action. It is distinguished from acapital gain which is the profit achieved by selling an asset. Capital appreciation may or may not be shown infinancial statements; if it is shown, byrevaluation of the asset, the increase is said to be "recognized". Once the asset is sold, the appreciation since the date of initially buying the asset becomes a "realized" gain.
When the term is used about valuation of companies publicly listed, capital appreciation is the goal of an investor seeking long-termgrowth. It is growth in the principal amount invested, but not necessarily an increase in the current income from the asset.
In the context of investment in amutual fund, capital appreciation refers to a rise in the value of the securities in a portfolio which contributes to the growth innet asset value. A capital appreciation fund is a fund for which it is its primary goal, and accordingly invests ingrowth stocks.[3]
'Gone are the days where you buy a house for capital appreciation,'Shapps... said
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