What Does it Mean?

In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid. If valuations placed on assets do not exceed liabilities, negative equity exists. In an accounting context, Shareholders' equity  represents the remaining interest in assets of a company, spread among individual shareholders of common or preferred stock.
In terms of investment strategies, equity (stocks) is one of the principal asset classes. The other two are fixed-income (bonds) and cash/cash-equivalents. These are used in asset allocation planning to structure a desired risk and return profile for an investor's portfolio.
This definition is helpful in understanding the liquidation process in case of bankruptcy. At first, all the secured creditors are paid against proceeds from assets. Afterward, a series of creditors, ranked in priority sequence, have the next claim/right on the residual proceeds. Ownership equity is the last or residual claim against assets, paid only after all other creditors are paid. In such cases where even creditors could not get enough money to pay their bills, nothing is left over to reimburse owners' equity. Thus owners' equity is reduced to zero. Ownership equity is also known as risk capital, liable capital or simply, equity.
An equity investment generally refers to the buying and holding of shares of stock on a stock market by individuals and firms in anticipation of income from dividends and capital gains, as the value of the stock rises. It may also refer to the acquisition of equity participation in a private company or a startup company. When the investment is in infant companies, it is referred to as venture capital investing and is generally understood to be higher risk than investment in listed going-concern situations.
The value of a property, less any debts owed on the property, is what’s known as equity. In the case of equity investment, the property is in the form of stock certificates and any debt is actually devaluation of the security. This devaluation may be incurred by a number of causes, from financial to plain foolish.
People that invest in private equity investments hope that these companies will turn around and become profitable again. Many hedge funds focus exclusively on this market. A small investor purchasing mutual funds or stocks can do the same by focusing on companies that are financially struggling.
For example, General Motors would be a great illustration of a private equity investment. This is an established company that is reemerging and might be very profitable in the future.
The equity investment market in India is unique and is on a look out to invest more in manufacturing, construction, real estate, healthcare and financial services. A firm understanding of an equity market and behavioral adjustments are required from the potential investors, who are novel to the equity investment in India and are looking forward to maximizing their profits.

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