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Direct Equities Explained

Equities are also commonly known as "shares". Shares make up the ownership of a company once they are issued.
 
Equities that are directly owned will be far more of a risk to own opposed to a bond as there is no security offered along with no specified term of the investment. This greater risk should enable one to expect a greater return. Equities in larger firms will often be engaged with multiple sectors of the marketplace. A smaller company however may only be doing business in just one sector in the marketplace which results in the equities being a greater risk.
 
The fees associated with buying direct equities are only related to whatever the brokerage one uses charges. This fee may vary between 0.35 to 2%. One would need to set up an account with the brokerage for them to make the purchase for you, as well as reimburse you for other transactions like dividend payments via the account.
 
One needs to be aware of liquidity constraints with direct equities. Generally large publicly listed companies that have millions of shares on issue are traded vigorously every day. Obviously this is not the case for small companies, so caution is advised before making this type of purchase. "Spread" is a concept word used with regards to liquidity in the equity markets. It refers to the difference between the bid and the offer, as quoted by the share brokers. The narrow the spread, the greater the liquidity of the equity.

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