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Why invest in equities?
Investing in the stocks and shares of global companies is one of the ways to achieve long-term growth within an investment portfolio, as the value of the shares may increase over time. Shares in some companies also offer the potential to receive income in the form of dividend payments.
The returns from equities depend on a number of factors, such as economic conditions, market sentiment and company news. Over the long term, equity markets have endured fluctuating conditions to outperform real estate, bonds and cash deposits.
Investing in equities does carry a higher level of risk than investing in these other asset classes, however, and investors should therefore expect greater volatility. Despite this, when used as part of a well-diversified portfolio, equities have historically proven an effective method of growing capital over the long term and protecting against inflation.
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