Equities

Corporate ownership is represented by shares of stock in the firm. Anyone who holds one or more shares of a coporation's stock is part owner of the business. This is why stocks are commonly referred to as equity securities. 

Stocks are often classified in the following ways:

• Growth stocks have earnings that are increasing at a faster rate than their industry's average. These are usually in new or fast-growing industries and have the potential to give shareholders returns greater than those offered by the stocks of companies in older, more established industries. Growth stocks are the most volatile class of stock, however, and are just as likely to go down in price.
• Value stocks are those of companies with good earnings and growth potential that are currently selling at a low price relative to their intrinsic value. Due to some problem that may be only temporary in nature, investors are ignoring these stocks. Since it can take quite some time for their true value to be reflected by their price, value stocks are usually purchased for the long term.
• Income stocks are generally not expected to appreciate greatly in share price, but consistently pay steady dividends. These are typically utilities, financial institutions, and other stable and well-established companies.
• Blue chip stocks are the stocks of large, well-known companies with good reputations and strong records of profit growth. They also generally pay dividends.
• Penny stocks are very risky speculative stocks issued by companies with short or erratic performance histories. These stocks are so named because they sell for under $5 per share. Their low price appeals to investors willing to assume a higher risk in exchange for the potential of explosive growth.