Returns vs. Profits

Let’s take a closer look at the difference between returns and profits on stocks! 💼

💡Return = 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! 😄

When your stock's price goes up, its “return” will be positive. ➕

But remember, return is not the same as profits 🍏

You make a profit when you sell your stocks when their return is positive 💰

💡 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 👖

This is because the stock price can change! 😬

So, even if your stock is increasing one day, it can go down the next day. 📉

Let’s say you buy some stock of Tesla when it’s worth $100!

Then it goes up to $150 on Monday! 🤑

If you don’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. 💪

Test your knowledge

Potential profit refers to….

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When do you make a profit from a stock?

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If a stock’s return is negative and you sell…

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What's next?

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