"Through capital appreciation or when there is an increase in the market price of your stocks and through dividends issued by the company you invested in."

There are two ways to make your money grow in the stock market:

1. Through an increase in stock price or capital appreciation - Capital appreciation is an increase of market price of your stock against the original price you bought it or the difference between the amount you paid when purchasing the shares or stocks and the current market price of the stock. But you well have paper losses if the company doesn't perform well as expected, and the stock price dragged down below your purchase price.

For example: if you buy a share of stock at Php100.00, and it rises to Php110.00, your capital appreciation or gain is Php10.00. Keep in mind, though, that you only realize your gain of Php10.00/share if you sell at Php110.00. If you choose to hold it and it further increases to Php150.00 your capital gain would be Php50.00/share. However, if your stocks decreases to Php100.00 then sell it at that price, your capital gain is zero.

2. Through dividends declared by the company. – The dividends given out to shareholders are the earnings of the company that is not going to be re-invested in their business. There are two types of dividends that can be given by companies: cash and stock dividends.

Cash dividend is the earning for every share of stock declared by the company. So, if the company declares a dividend of 25 centavos per share, a stockholder with 10,000 shares will received a cash dividend of Php2,500.00, gross of tax (Php0.25x10,000) in cash.

Stock dividend is the additional shares compensated to the shareholders at zero cost. If the company declares a 25% stock dividend, a stockholder with 10,000 shares will be entitled to an additional 2,500 shares of stock. These shares can be also being sold anytime after the shares have been issued.