Asset Classes: Equities

Equities, or stocks and shares, represent ownership of a company as well as a claim on the company's earnings and (in the event of the company going bankrupt) its assets. We explore the two most common forms of equities, common stock and preferred stock. We then look at the sources of return on both of those forms of equities. The sources of return are not guaranteed and we explore the volatility surrounding those returns and the risk premium paid to shareholders for taking on those risks.