What is Equity?
From the end of a listed company, equity means the funds that the shareholders have invested. whereas from an investor’s point of view, equity is a primary asset. As an investor, you can also choose to invest in derivatives – like currencies, commodities and bonds – which allow equities to diversify beyond stocks.
Benefits of investing in equities
- Investment in stocks provides the highest returns, especially over a long-term investment horizon.
- Investment in equities can also provide you income through dividend issuance. Issuing dividends is a corporate action, where listed companies share their profits with existing shareholders.
- Equities have greater exposure to market volatility. Hence, conducting market research is important before investing.
- You can minimize the associated risks by choosing to invest in equity instruments, like Futures and Options (F&O).