Equity instruments are financial assets that represent ownership in a company. The most common type of equity instrument is stocks, which give investors a share of the company's profits and voting rights in corporate decisions. When individuals buy stocks, they become partial owners and can benefit from the company's growth and success. Another type of equity instrument is preferred shares, which typically offer fixed dividends and have priority over common stocks in asset liquidation. Equity instruments are essential for companies to raise capital and for investors to build wealth through potential appreciation and income generation.