What are An equity is a share in a company Buying shares makes you part-owner of the company equities? Because you are part-owner, the value of your investment will rise or fall with the company’s successes or failures Equities in a nutshell When you buy equities, you become part-owner of the Primary market: when a company sells its shares to company and have a share in its profits. As you buy investors for the first time on a stock exchange, such as more equities, your share in the ownership of the company the London Stock Exchange. This is called an Initial Public becomes greater. You may also have certain voting rights Offering (IPO). IPOs may be available to all investors or if you buy the shares directly; however, generally, you will may be restricted to institutions only, such as pension have very little say in how the company is run. Usually, funds, insurance companies and investment funds. if you own shares with voting rights you will be entitled to one vote per share to elect the board of directors at Secondary market: Once shares are issued through annual general meetings. an initial public offering, they can then be sold and subsequently bought by other investors on the secondary How do they work? market of the stock exchange. That is to say, secondary A company will sell shares to raise money for the business – markets enable the buying and selling of previously to expand, to invest in new ventures, or sometimes to pay owned shares. off its debts. A company may choose to issue and trade shares through the following ways: 3