What is Equity?

Equity represents ownership in a company, typically through stocks. When you buy equity, you become a partial owner and may benefit from dividends and capital gains. While equities offer the potential for high returns, they also carry a higher level of risk compared to other investments.

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How Equity Works?

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Purchase Stocks

Buy shares in a company, gaining ownership.

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Ownership Benefits

Receive dividends (if paid) and vote on company matters.

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Capital Growth

The value of shares may rise as the company grows.

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Selling Shares

Sell your shares on the stock market to realize gains or losses.

What are Stocks?

Stocks are shares of ownership in a company.

There are two main types:
  • Common Stocks: Offer voting rights and potential for dividends.
  • Preferred Stocks: Provide fixed dividends, with no voting rights.

Stocks are bought and sold on exchanges, offering investors a chance to profit from a company's success.

What is Trading?

Trading is buying and selling assets like stocks to make a profit.

Types of trading include:
  • Day Trading: Quick buy-and-sell actions within a single day.
  • Swing Trading: Holding stocks for a few days or weeks.
  • Position Trading: Long-term investing over months or years.

Trading can yield high returns but carries higher risk due to market fluctuations.

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Benefits of Equity

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High Return Potential

Significant capital gains and dividends.

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Dividends

Regular income from dividend-paying stocks.

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Ownership

Voting rights and influence on company decisions.

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Diversification

Balances risk in a portfolio.

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Liquidity

Stocks are easily tradable for flexibility.

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Wealth Creation

Long-term growth potential for financial goals.