This section provides a brief introduction to equities,
including benefits of investing in equities and the risks
involved: Equities are pieces of a company, also known as
"stocks." When you buy stocks or shares of a company, you're
basically purchasing an ownership interest in that company. A
company's stockholders or shareholders all have equity in the
company, or own a fractional portion of the whole company. They
buy the stocks because they expect to profit when the company
profits. Companies issue two basic types of stock: common and
preferred shares. Both public and private corporations can issue
common shares. Common shareholders are the owners of a company
and initially provide the equity capital to start the business.
Common share ownership in a public company offers many benefits
to investors. The following are some of its main advantages:
There are also a few drawbacks to owning common shares. Although
part owner of the business, common shareholders are in a
relatively weak position, as senior cred