[1] It may refer to appreciation of company stocks or bonds held by an investor, an increase in land valuation,[2] or other upward revaluation of fixed assets.
Capital appreciation may occur passively and gradually, without the investor taking any action.
When the term is used about valuation of companies publicly listed, capital appreciation is the goal of an investor seeking long-term growth.
It is growth in the principal amount invested, but not necessarily an increase in the current income from the asset.
In the context of investment in a mutual fund, capital appreciation refers to a rise in the value of the securities in a portfolio which contributes to the growth in net asset value.