On what factors does the income made by investments in equity depend.

The value of investments made in equity can increase or
decrease based on many factors. These include macroeconomic factors like the present
state of the economy, liquidity available in the system, expected future prospects of
the economy, etc.

If investments are being made in the
stock of individual companies their value changes based on present earnings, expected
future earnings, rate of growth of the market that the company is catering to, the
management of the company, etc.

Unless investors can
analyze and accurately predict the performance of individual companies, which is a very
difficult thing to do even for professionals in this field, the common advice is to buy
stock of several companies or to diversify. This ensures that the downward movement in
the price of one company's stock is taken care of by the upward movement in the price of
the stock of others.

Equity investments are a relatively
risky way of investment. Though the gains that can be made are very high, so are the
losses.