An equity is another name for a share of the total equity of a company. In buying equities you become a shareholder who is entitled to receive dividends paid by the company and to subscribe for new equities in equity issues, and who possibly also has voting rights at a shareholders’ meeting.
The target return for equities is clearly higher than for several other investment products. However, as equities react quite strongly to market movements, their level of risk is also higher. The risk related to equity investments can be reduced by efficiently diversifying the investments.
Equity investing should be viewed as a long-term activity, even though short-term trading is also possible. Through Sampo Bank you can easily trade in the equities listed in 15 marketplaces around the world.
As shareholders’ returns depend on the success of the company, equity investment is best suited for active, independent investors who are dedicated followers of the performance of companies and investment markets.
Equities are an excellent way of investing slightly larger sums, too, for a well-diversified equity portfolio should represent well over ten business sectors.