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Capitalizing On Capital Gains

Capitalizing On Capital Gains

Capital gains income is a great income source where your money works for you, and not the other way around. Bloom Investment Counsel, Inc. actively makes the most of capital gains income on behalf of its clients, strategically purchasing equities when prices are relatively low, and (if the opportunity is right and there is no advantageous long term gain in sight), selling high so that clients can profit from the difference.

What Is Capital Gains Income?

  • When you earn income from a capital gain, you sell an asset for more than you paid for it.
  • Capital Gain = Selling Price – Purchase Price

In Canada, capital gains income is generally taxed at the lowest rates, making it a favourable investment strategy.

What Is An Example of Capital Gains Income?

  • Taking a real-world example, if you purchase one share of Apple, Inc. (APPL) at $120, and over the next week, the price skyrockets to $150 and you sell it at that higher price, your capital gains income is the difference—$30. 

What Are The Pros of Capital Gains Income?

  • Capital gains income is taxed at favourable rates in Canada—meaning you get to keep more in your pocket.

What Are The Cons Of Capital Gains Income?

  • There is always the chance that a particular equity could continue to rise in value after you have sold it, even if you’ve already received a net positive return—the opportunity cost of selling too soon can be very high in some cases.

This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.

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