capital growth

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An increase in the value of invested capital. Investment in fixed-interest securities or bonds provides income but limited capital growth (which may be improved in index-linked gilt-edged securities). To have a chance of making substantial capital growth it is necessary to invest in equities (see ordinary share), the value of which should increase more rapidly than inflation. Investing in equities is thus said to be a hedge against inflation. See growth stocks.

Subjects: Financial Institutions and Services.

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