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Fortune
Fortune
Ivana Pino

What you need to know about investing in dividends

Close-up of hands banking on mobile phone (Credit: Photo illustration by Fortune; Original photo by Getty Images)

Investing in the stock market can be a great way to build long-term wealth. It can also be an income stream for some investors, depending on the kind of assets they invest in.

One way investors earn money is through buying stocks, holding them for an extended amount of time, and selling them once they’ve gone up in price (known as capital gains). But there’s another way shareholders can receive a portion of a company’s profit when that company has a surplus of revenue, usually on a quarterly basis: dividends.

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