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Listed vs Unlisted Shares: Essential Points to Consider - Babli InvestmentListed vs Unlisted Shares: Essential Points to Consider - Babli Investment

Listed vs Unlisted Shares 8 Points to Consider for Investing

The majority of people nowadays do not have enough savings to make sure they have absolute financial security. Investing money so that it can grow and prosper is better than leaving it to stagnate since it would benefit the currency and the economy as a whole. Having said that, investments do come with their own set of risks, which makes it necessary for investors to be savvy with their investments.

What is unlisted company shares and what is unlisted shares ?

Unlisted shares are shares of an unlisted company that are not traded on the official stock exchanges. Private companies that are not listed are generally owned by investors and their peers and have not yet become public companies due to non-compliance with listing requirements.

Managing risk by diversifying:

A portfolio of unlisted shares can complement one invested in listed shares by offering different risk dynamics. Portfolio diversification can be achieved through them. Shares that are unlisted have similar to higher return potential than those that are listed. The stock exchanges may list these stocks at some point in the future, which could result in a substantial upside. 

Undervaluation caused by low liquidity:

The shares are significantly less volatile due to their illiquidity. In comparison to listed shares, the standard deviation is much lower. Nevertheless, if you make the wrong investment, you can suffer substantial losses. Prices of these stocks will not fluctuate every day, and demand and supply will not be tracked regularly. 

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