Several studies have shown that stocks outperform all other asset classes over time. Stock returns are capital gains and dividends.
When you sell a stock for more than you paid for it, you make a capital gain. Dividends are distributed by a company to its shareholders. Dividends make up the majority of a company's return on equity. Dividends and capital gains have accounted for a quarter of all equity returns since 1956.

At an early stage, a stock similar to one of the mythical FAANG quintet - Meta, Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Alphabet (GOOGL) - may seem appealing, but in fact, home runs like these are rare.

The portfolios of investors who wish to take more risks should be more risk tolerant. They prioritize capital gains over dividends. Investors who require income from their portfolios may choose companies with a history of paying high dividends.

Stock investing involves purchasing shares of a company to gain partial ownership, aiming for potential profit through price appreciation and dividends. It is a key strategy for wealth building, offering higher returns over the long term compared to other asset classes like bonds or savings.

Investors can choose between individual stocks or diversified funds such as mutual funds or ETFs. Successful stock investing requires research, understanding market trends, and aligning investments with financial goals and risk tolerance. Patience and a long-term perspective are crucial, as stock markets experience fluctuations. Diversification and disciplined investing help mitigate risks and maximize returns over time.