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StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
Another word for stocks or ownership in a company.
Why It Matters
When finance people say 'equity,' they usually mean stocks. An 'equity fund' invests in stocks. 'Equity markets' are stock markets. Home equity is different - that's the portion of your house you actually own. Understanding this terminology helps you decode financial news and fund names.
Key Points
- Private equity: Ownership in companies not traded on stock exchanges (for wealthy/institutional investors)
- Equity compensation: Stock or stock options given to employees as part of their pay package
- Shareholder equity = company's assets minus liabilities (what shareholders would get if company liquidated)
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Common Questions
Another word for stocks or ownership in a company. When finance people say 'equity,' they usually mean stocks. An 'equity fund' invests in stocks.
When finance people say 'equity,' they usually mean stocks. An 'equity fund' invests in stocks. 'Equity markets' are stock markets. Home equity is different - that's the portion of your house you actually own. Understanding this terminology helps you decode financial news and fund names.
Private equity: Ownership in companies not traded on stock exchanges (for wealthy/institutional investors)
Equity compensation: Stock or stock options given to employees as part of their pay package
Shareholder equity = company's assets minus liabilities (what shareholders would get if company liquidated)