What Is an Equity Security?

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An equity security is a security that someone will have equity in a company, in which possessed shares are common or preferred. Discover how equity shares can give a person greater voting power with help from a registered financial consultant in this free video on investments and personal finance.

Part of the Video Series: Beginner Investing
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Video Transcript

This is financial adviser Patrick Munro, talking about what is an equity security? An equity security is a security, that you have equity in the company, and the shares that you may have, are either common or preferred shares. Preferred shares have a higher voting level. In other words, it's like the first class of shares, if you will. Equity shares for stock involve a position, where the more you have in a particular stock, the more equity you do have as well, in that company, and when it comes time for voting on company business, you can actually get on an airplane, go to the meeting, and your voice will be heard, because you are a shareholder, you have equity in that company, and this is important for you to note, in this ownership society that we live in, because eventually when you become retired, you can sell your equity positions for cash, and that will form your retirement going forward. This is Patrick Munro, financial adviser, talking about equity securities.


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