Equity
Equity
In the context of stock market investments, Equity is ownership of an asset of value. Equities are market-linked investments that do not come with an assurance of bearing fixed returns. Returns on equity thus depend on the underlying asset’s performance.
Benefits of Equity
Higher liquidity
You get the flexibility of changing your holding pattern as per your needs and convert your holding into cash instantly. Because there is always someone who buys a share and someone who sells it. So, buying and selling stock at any given point of time is very easy.
Long term & short term capital gains
Long-term capital gains result from selling capital assets owned for more than one year. And short-term capital gains result from selling capital assets owned for less than one year.
Corporate actions
An event that brings material changes to a company and affects its stakeholders. These may be either monetary e.g. dividend, or non-monetary e.g. Bonus, rights, or stock splits.
Industry diversification
Investors get to choose from a lot of options to invest in and diversify their portfolio.