Equities, commonly known as stocks, give shareholders a proportional ownership in a corporation. When you own equity in a company, you own a portion of the company itself, which entitles you to a share of the profits (dividends) and gives you voting rights in major decisions. The value of equities fluctuates based on the company’s performance and market conditions, and they are traded on stock exchanges. Equities are considered a riskier investment than bonds but offer the potential for higher returns.
Equities Example
For example, if you buy 100 shares of Apple stock, you own a small percentage of Apple and can benefit from its growth through share price appreciation or dividends.