Price movements
Stocks attract supply and demand hence their prices fluctuate daily but the price of equity
does
not fluctuate.
Public
involvement
While the general public doesn’t normally get involved in a company’s equity issues, the
issuing,
buying, and selling of stocks tend to involve general public participation.
Risk
Equity is comparatively riskier because it involves more than just stocks. While stockholders
are
only liable for amounts up to the value of the stocks they own, equity holders directly face
all
the complexities faced by a business entity.
Owning a
stake in a company is not the same as trading stocks
Owning a
stake in a company
is not the same as trading stocks
Although both investing in stocks and trading stocks involve trying to make some gains in the
stock markets, they are two very different approaches. While investing involves getting a
stake
in a company by buying and holding stocks for the long term, stock traders typically buy and
sell stocks to capitalise on market movements and make short-term profits.