Equity or Equity shares are Certificates issued to owners of a Company. These Certificates can be actual certificate on paper or held in Electronic form in Demat Accounts. Equity represents the ownership rights in a company. Each company may issue millions of Equity shares which are registered in the name of Individuals or Business Entities according to their Investment towards the Capital of the Company.
BSE is the oldest Stock Exchange in India. BSE and NSE account for most of the transactions that occur in securities in India.
As on 1st March 2016, there are 5,448 companies listed on the BSE out of which 3,928 companies were available for trading. The rest of the companies have been suspended from trading till further notice. There are about 1,500 companies listed with NSE as of today.
Equity refers to the shares, an Investor holds in a business or company. These shares are listed on Stock Exchange (like BSE or NSE etc.) to facilitate purchase and sale between shareholders and those interested in buying such shares. Equity has turned out to be the largest wealth creator in the last 36 years in India. Its performance can only be compared to Real Estate which came into prominence in the last decade.
The number of Investors investing in Equity, either directly or through the Mutual Fund / Portfolio Management route has shown significant rise in the last two decades. Equity has given over 17% Compounded Annual Growth Rate (CAGR) in the 36 since 1979, after adjusting for inflation. Gold has given only about 4% in the same period.Equity can give excellent returns from a long term (5 – 10+ years) perspective. Equity markets are more predictable in the long term than in the short term. An Investor investing in Equity has 3 options.
Equity Based Mutual Funds.
Directly Investing in Equity.
Portfolio Management Services (PMS).
Article Originally Written in March 2019
Related reading: mutual funds vs direct equity, and Portfolio Management Services explained.
