Returns vs. Profits

Letโ€™s take a closer look at the difference between returns and profits on stocks! ๐Ÿ’ผ

๐Ÿ’กReturn = the change in value of an investment, so the potential profits or loss

If you invested in stocks worth $200, and they are now worth $300, your return would be $100! ๐Ÿ˜„

When your stock's price goes up, its โ€œreturnโ€ will be positive. โž•

But remember, return is not the same as profits ๐Ÿ

You make a profit when you sell your stocks when their return is positive ๐Ÿ’ฐ

๐Ÿ’ก Profit-taking = selling a stock when it has increased in price, so that you make a profit.

So, even if your stock value increases, you don't make a profit until you sell it ๐Ÿ‘–

This is because the stock price can change! ๐Ÿ˜ฌ

So, even if your stock is increasing one day, it can go down the next day. ๐Ÿ“‰

Letโ€™s say you buy some stock of Tesla when itโ€™s worth $100!

Then it goes up to $150 on Monday! ๐Ÿค‘

If you donโ€™t sell on Monday, you earn $0 but your return is still 50%.

If you sell on Monday, then you profit $50!

When you sell a stock on Bloom the value of that stock goes back to your buying power. ๐Ÿ’ช

Test your knowledge

Potential profit refers toโ€ฆ.

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When do you make a profit from a stock?

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If a stockโ€™s return is negative and you sellโ€ฆ

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What's next?

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