Capital Accumulation

What is 'Capital Accumulation'

Capital accumulation refers to profits that a company uses to increase its capital base.

Capital accumulation involves acquiring more assets that can be used to create more wealth or that will appreciate in value.

Alternatively, capital accumulation can also refer to when an institutional broker or individual investor acquires a large number of shares of a particular stock or mutual fund over an extended period of time.

BREAKING DOWN 'Capital Accumulation'

Institutional brokers may employ this strategy when they find a particular company attractive and want to acquire a significant number of shares of its stock without driving up the price. Investors employ this strategy through regular investing in a particular mutual fund in which they reinvest dividends and capital gains.

RELATED TERMS
  1. Capital Allocation

    A process of how businesses divide their financial resources ...
  2. Dividend

    A distribution of a portion of a company's earnings, decided ...
  3. Capital Formation

    A term used to describe net capital accumulation during an accounting ...
  4. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
  5. Broker

    1. An individual or firm that charges a fee or commission for ...
  6. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
Related Articles
  1. Markets

    Is Growth Always A Good Thing?

    Getting big quickly looks good, but companies can get into trouble when they do it too fast. Find out how to spot this trouble.
  2. Investing Basics

    How And Why Do Companies Pay Dividends?

    If a company decides to pay dividends, it will choose one of three approaches: residual, stability or hybrid policies. Which a company chooses can determine how profitable its dividend payments ...
  3. Options & Futures

    Dividends, Interest Rates And Their Effect On Stock Options

    Learn how analyzing these variables are crucial to knowing when to exercise early.
  4. Bonds & Fixed Income

    What Are Corporate Actions?

    Be a savvy investor - learn how corporate actions affect you as a shareholder.
  5. Fundamental Analysis

    Why Dividends Matter

    Seven words that are music to investors' ears? "The dividend check is in the mail."
  6. Markets

    Your Dividend Payout: Can You Count On It?

    We go over several telling factors that can help you answer this question and avoid losses.
  7. Investing Basics

    How Dividends Work For Investors

    Find out how a company can put its profits directly into your hands.
  8. Mutual Funds & ETFs

    3 Expensive Mid-Cap Mutual Funds Worth Your While (ETAGX, VMACX)

    Discover three mutual funds with above-average expense ratios and consistent outperformance of the S&P 500 Index and the Russell Mid-Cap Index.
  9. Mutual Funds & ETFs

    JANBX: Overview of Janus Balanced Fund

    Discover a balanced mutual fund with a solid performance history, weathering down markets and routinely outperforming equity indexes in up markets.
  10. Mutual Funds & ETFs

    Trends in Capital Flows: U.S. Equities

    Analyze asset flow data for U.S. equity mutual funds and ETFs from 2014 and 2015 to identify changes in demand, investor sentiment and outlook.
RELATED FAQS
  1. What are the most important aspects of a capitalist system?

    Understand the main aspects of a capitalist system and how they contrast with the tenets of other types of economic systems, ... Read Answer >>
  2. Is a money market account the same as a money market fund?

    Discover the differences between money market accounts and money market funds, including minimum balance requirements, withdrawal ... Read Answer >>
  3. What typically comprises a money market fund?

    Learn about the basic types of money market funds and discover how they are characterized by the types of investments that ... Read Answer >>
  4. Do financial advisors get paid by mutual funds?

    Learn how mutual funds reimburse financial advisors for recommending that their clients invest in funds and stay invested ... Read Answer >>
  5. What advantages do exchange-traded funds have over mutual funds?

    Exchange-Traded Funds (ETFs) are growing ever more popular, as they were created to combine the best characteristics of both ... Read Answer >>
  6. When do you invest in a commingled fund vs. separate account?

    Explore situations when a commingled fund is a more suitable investment vehicle than a separate account. Read Answer >>
Hot Definitions
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  2. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  3. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  4. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  5. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  6. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because ...
Trading Center