Equity investing is basically buying shares in individual companies. The value of your investment goes up and down in line with the share price. In addition, you will usually receive a share dividend (a share of the company’s profits) twice a year.

Share prices are usually driven by how well the company does and demand – the more people that want to own a particular share, the higher the price goes (and vice versa).

Putting all your savings into the shares of one particular company is generally considered to be risky, as all your eggs are in a single basket – if the company does badly, then so will you.

If you invest in equities, it’s possible to reduce your risk by holding a range of different companies' shares. For most people, the easiest way to do this is to invest in a fund.