Are equities stocks?

Yes, in terms of investing, equities and stocks are the same thing. Both refer to ownership shares in a public company. Those shares can be bought and sold on various U.S. and global markets and exchanges. By extension, the terms “stock market” and “equity market” are also synonymous.

When you buy a share of stock, you receive equity, or ownership, in a company. Investors do so with the hope or expectation that the price of that stock will increase and that they may also receive a distribution of profits in the form of dividend payouts.  Equity investing may come with increased volatility and loss of principle as there is no guarantee of a company’s success or a return on investment. That risk is counterbalanced with the potential for a greater return than certain other investment opportunities. Investment professionals generally consider equities to be a key component of a fully diversified portfolio.


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