| Those new to investing may be excused for | | | | stock market crashes and the company goes bust. |
| becoming confused about all the terms used. Stocks | | | | On the other hand, if the stock market is stable or |
| and bonds, shares and equities - just what are those | | | | rising, then you stand to gain a great deal - which is |
| equities, anyway? An equity is a stock or share | | | | the reason you invested in the first place. The risk of |
| bought in a company - of course people don't just | | | | buying equities can be mitigated to a great degree |
| buy one share; there is usually a minimum purchase | | | | by making sure you have the proper diversity of |
| requirement. It could be of $500 or $1,000 or more. | | | | funds. An investor should not only invest in several or |
| This is usually called an equity fund. | | | | more companies of the same type, but many |
| When you purchase an equity fund or in other words | | | | companies of different types, such as mining - and |
| you invest in a company, you are taking a risk in that | | | | mining different products; IT; the retail sector; |
| if the company fails to do well, then your equity will | | | | banking and many others. It is also possible to |
| eventually be worth a great deal less than you paid | | | | increase the diversity by buying internationally as well |
| for it. You could even lose all your money if the | | | | as in your country of origin. |