Equities
ˈɛkwɪtiz
Definitions
2 meaningsThe ownership of assets, specifically in the form of shares of a company.
ˈɛkwɪtiz
Ownership interests in a company or financial assets
The investor's portfolio includes a variety of equities from different sectors.
💡 Simply: Equities are like owning a piece of a company! Imagine you buy some 'slices' of a pizza restaurant. Each slice is an equity, and if the restaurant does well, your slices become worth more!
👶 For kids: Equities are like owning a small part of a big toy store. If the toy store does well, your part is worth more!
More Examples
Equities are considered a higher-risk, higher-reward investment compared to bonds.
The stock market's performance is often measured by indices that track the value of various equities.
How It's Used
"Investors often diversify their portfolios by holding a mix of stocks and bonds, with some allocation to equities."
"The company issued new equities to raise capital for expansion."
The difference between the value of an asset and the amount of debt associated with it.
ˈɛkwɪtiz
The value of an asset after deducting any debts
The equity in the property has increased significantly due to market appreciation.
💡 Simply: Think about it like this: You buy a house (the asset). You take out a loan (the debt). The equity is the value of your house MINUS the amount you still owe on the loan. That's how much of the house is really yours.
👶 For kids: Equity is how much of something you really own. Like, if you have a piggy bank, and some money is inside. The equity is all the money after you take out your expenses (like buying a new toy).
More Examples
The business owner sold a portion of his equity to secure investment.
Building equity is a key financial goal for many families and individuals.
How It's Used
"Homeowners can borrow against the equity in their homes to finance improvements."
"The company's equity represents the owners' stake after all liabilities are settled."
Idioms & expressions
High-equity loan
A loan that is provided when the borrower has substantial ownership in an asset.
"She opted for a high-equity loan to get favorable rates."
Public Equities
Stocks that are traded on public exchanges and can be bought and sold by anyone.
"Public equities offer a high level of transparency and liquidity."
From Middle English "equite" meaning "justice, fairness," derived from Old French "equité" and ultimately from Latin "aequitas," meaning "equality, fairness."
The term has been used since the early 17th century, originally in the context of fairness and just treatment, and later adopted in financial contexts.
Memory tip
Think of 'equities' as your slice of the pie (the company).