what are equities

Equity is a term used in finance to describe ownership interest in property that may be offset by debts or other liabilities). It is measured for accounting purposes by subtracting liabilities from the value of the assets owned. Equity can apply to a single asset, such as a car or house, or to an entire business). In the context of the stock market, equities are simply shares in the ownership of a company. When a company offers equities, it is selling partial ownership in the company. Equity investors purchase shares of a company with the expectation that theyll rise in value in the form of capital gains and/or generate capital dividends. If an equity investment rises in value, the investor would receive the monetary difference if they sold their shares, or if the companys assets are liquidated and all its obligations are met. Equities can strengthen a portfolios asset allocation by adding diversification. Equity can be found on a companys balance sheet and is one of the most common pieces of data employed by analysts to assess a companys financial health.