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Equity

POSTED ON JANUARY 07, 2022    

What it is

In investing, equity refers to the amount of money that would be shared among all stockholders of a company if all assets were sold off and debts were repaid. It can also represent the book value of the company.

 

When you have equity in a company, it means that you are a part-owner. This usually happens when you buy shares of the company in the stock market, or if you put money in a pooled fund (like Unit Investment Trust Funds or UITFs) that holds these shares.

 

What it means for you

Having equity in a company may allow you to share in its growth, either through capital appreciation (stock prices going higher) or dividends.

 

There are different ways to acquire equity through investments, and most of these involve stocks. These include direct purchase of shares, pooled funds that focus on or have a lot of stocks (like equity and balanced funds), and private equity investments.

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