Investing in equities

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Equities, also known as stocks or shares, are one of the most popular asset classes for investing. They are the only asset class that has delivered gains over the long term once taxes, charges and inflation are all taken into account.

Although the returns from equities can be good the risks are higher than with other asset classes. It is possible for the value of the investment to go down as well as up and in extreme cases you can lose all of the money invested. For this reason investments in equities are only for those who can afford to lose the value if the investment if things go wrong.

When you buy equities you are buying a share of a company. This gives you a stake in the future success or failure of that company. It is possible to own shares of both private and public listed companies although only public companies can offer their shares for public sale so these are the ones that most investors will purchase.