What Is Equity in Investing?

By Kristi Waterworth – Updated Dec 13, 2024 at 9:51 AM

Key Points

Investments like stocks and mutual funds, termed equities, are SEC-regulated and offer profit potential.
Equity represents ownership value after deducting any debts, applicable to businesses and securities.
Using equity for loans can fund business expansions or investments but carries inherent risks.

Buying an investment is a way to make your money grow. It all starts with the cold, hard cash you put down and increases through interest, inflation, the growth of a company, or a combination of the three.

Loading paragraph...

Loading image...

Loading paragraph...

What is the Difference Between Simple & Compound Interest?

One's good for borrowers; the other's good for investors.

Futures vs. Options: What's the Difference?

Betting on the future of a stock or commodity can take many forms.

Understanding Taxation of Your Retirement Income

Just because you're retired doesn't mean you're living tax-free.

Best Index Funds and How to Invest in Them

Index funds track a particular index and can be a good way to invest. Get a fast introduction to index funds here.

Loading hub_pages...

Loading paragraph...

About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

TMFMaldivesBlue

@MaldivesBlues

The Motley Fool has a disclosure policy.