Investors put their money into stocks because they want their money to make money. The two ways stocks make money are through the receipt of dividends, and through capital appreciation.

Dividends
Just to refresh your memory, dividends are the portion of a company’s earnings that is paid to the investor every three months. Companies happily pay dividends when they make money. However, when profits are down or if these companies start losing money, they can decide to stop paying dividends.

The date a company announces the amount of dividends it will pay to its stockholders is called the Declaration Date. But not every-one who owns the company’s stock will get the dividends. It depends on when the shares were purchased. If the investor bought the shares by a date called the Ex-Dividend Date, he or she will receive the dividends. The dividend is sent to the investor on a date called the Payment Date. You may find that publishers, whether they are print or Internet-based publishers, report the yearly dividend of companies instead of the amount that is paid every quarter. So, a quarterly dividend of $.50 is reported as a $2.00 dividend -- four times the quarterly dividend.

Capital Appreciation
Besides dividends, the only other way to make money with stocks is through Capital Appreciation or Capital Gains as it is sometimes known. Capital appreciation is the increase of the price of a stock.