Submitted by nsscadmin on
Equities go by many names, including shares and stocks. When you purchase equities, you are purchasing an ownership stake in a public company. This may entitle you to voting rights at shareholder meetings and profits that are allocated to shareholders. These profits are known as dividends and only have to be given to shareholders at the company’s discretion.
Investors make money on shares through dividends or an increase in the shares value. There is no guarantee that the value of a share will increase or that a company will pay shareholders dividends. Shares can also decrease in value. If you sell a share for more than you paid for it, you have made a capital gain. If you sell a share for less than you paid for it, you have made a capital loss.
Shares have the ability to deliver higher returns than fixed-income investments, but that brings with it higher risk. Instead of higher returns you could end up with higher losses.
