What are Equity Investments?
By definition, equity is the money and assets that are contributed by the owners of a company to fund it. In the case of organizations that are big and become public companies (owned by the general public as well as original owners), the shares are traded among multiple people and organizations on a stock exchange.
Your benefit in this is that wherever the company makes money and is done paying off all its borrowings and expenses, you get something called a dividend in return.
These are your equity investments.
However, equity investments carry both risks and rewards.
Rewards: Advantage of extremely volatile prices of stocks in hopes for profits from spikes. These returns are often high (more than debt investments in almost all cases)
Risks: No guarantee of returns as there is no obligation on the company to pay a fixed dividend.
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De Jargonising Equity
STOCKS/SHARES
STOCK EXCHANGE
STOCK EXCHANGE
An equity investment is money that is invested in a company by purchasing shares of that company in the stock market. These shares are typically traded on a stock exchange.
STOCK EXCHANGE
STOCK EXCHANGE
STOCK EXCHANGE
It’s a platform where securities (debt and equity instruments can be traded). In India, the 2 dominant exchanges are National stock exchange(NSE) andBombay stock exchange(BSE)
INDEX
STOCK EXCHANGE
Index Type 1 : SENSEX
Since an individual investor cannot keep track of every company’s stock prices, there are two indices that are used to track the direction of the Indian stock market. (gives an idea of the collective trend of the market during a certain time i.e whether prices are rising or falling on the whole). These indices are calculated daily. They are Sensex and Nifty 50.
Index Type 1 : SENSEX
Index Type 1 : NIFTY 50
Index Type 1 : SENSEX
Stock market index for Bombay stock exchange(BSE). Comprises of the market holdings of the top 30 companies listed on the BSE. It is calculated by adding up these holdings and dividing them by a number called the index divisor. The figure obtained is then counted in ‘points’.
Index Type 1 : NIFTY 50
Index Type 1 : NIFTY 50
Index Type 1 : NIFTY 50
Stock market index for National stock exchange(NSE). Comprises of the market holdings of the top 50 companies listed on the NSE. Calculated in a similar manner.