When the stock market is growing exponentially, it is almost unthinkable to sell unlisted shares for a value less than the price you bought them. Since we all are aware of the market volatility, we should remember the significance of intelligent diversification of our investment portfolio regardless of market conditions. For setting up an investment strategy to minimize the potential risks of the stock market, investors must opt for a well-thought-out diversification of investment portfolios.
What Is The Diversification Of An Investment Portfolio?
Many financial planners, wealth managers and experienced investors have been using the term “diversification” to reduce the stock market investment risks. It is an investment portfolio management strategy that combines the different types of investment in an individual investor’s portfolio. The concept behind diversifying an investment portfolio is yielding higher returns through various returns. Moreover, it also ensures that investors encounter lower risks by putting their money in different investment assets.
We must remember that investing is an art, not a reaction to market trends, and a suitable time to practice organized investing with a diversified portfolio before diversification becomes necessary. 80% of the damage has already been done by the time the typical investor “reacts” to the market volatility. More than anywhere else, a good offence is your best defence, and a well-balanced portfolio coupled with a five-year investment plan can lower the risks of market fluctuations.
The most common practice for diversifying the portfolio is avoiding putting all your money in one company’s shares. Instead, buy unlisted shares of different companies from multiple industries. You can opt for firms you trust and use in your everyday life. However, apart from stocks, you can also opt for commodities, ETFs (Exchange Traded Funds and REITs (Real Estate Investment Trusts) to diversify your portfolio.
Sustainable Investing: Creating Social Impact While Yielding Good Returns
Sustainable investing has witnessed significant growth in the last decade and is considered a great way to diversify a portfolio. However, it is often misinterpreted, and a few investors think sustainable investment restricts a portfolio to a narrow market segment. But, different research has shown that many companies across various industries have aligned their goals with the ESG (Environmental, social, and governance) framework.
If you have invested in a company involved in sustainable practices, it impacts your portfolio significantly. It would be best if you understood how goals aligned with the ESG framework could turn into fundamental changes to your investment portfolio. Simply put, consider investing in a company that manufactures eco-friendly products, has minimized its carbon emission or uses green or renewable energy to run its operations. In India, many companies are promoting sustainable business practices. Grasim Industries, Tech Mahindra, Tata Power Company, and Wipro are a few sustainable companies.
Retail Investors Can Diversify Portfolio With Cochin Airport Unlisted Shares
Cochin International Airport Limited (CIAL) is setting new milestones in terms of sustainability, which is uncommon in the aviation industry. The aviation industry is now attempting to achieve sustainability but still has a long way to go. It was the world’s first green airport powered entirely by solar energy, and Cochin International Airport runs all its operations using solar power. It is Kerala’s largest airport and one of India’s busiest airports in terms of passenger traffic. CIAL is also quite large, and its runway is more than 3 kilometres long. Retail Investors who wish to diversify their portfolio and consider sustainable investment can buy Cochin Airport unlisted shares.
Aircraft are not the only source of carbon emissions in the aviation industry, and ground operations of airports also contribute significantly. Airports are huge industrial hubs as they handle travelers and cargo, consume a lot of energy, and usually have heavy carbon footprints. Cochin Airport uses solar or green energy for all its operations and has also expanded its sustainable network across Kochi and different parts of Kerala.
The firm’s primary revenue generators are airfares, shipment operations revenue, X-ray screening charges, royalty earnings from subsidiary companies, leases and services, and the buyout of duty-free items. The airport is sponsored by a public-private partnership in which the Kerala government holds 32% of the equity. The revenue generated by its operation in 2023 was around ₹954.8 crore, which is an 80% increase in its revenue from the previous year. While its PAT (Profit After Tax) increased 8 folds from 35 crore in 2022 to 292 crore in 2023. Cochin Airport has signed a bilateral air-bubble agreement with 28 nations to fly international passengers to these destinations.
The company has planned to launch its IPO in the upcoming two to three years but hasn’t filed its DRHS to SEBI yet. It has recovered from the negative impact on the travel industry caused due to COVID outbreak and started registering profit-making revenues. So, retail investors need to diversify their investment portfolio and look for an aviation company for sustainable investment that can invest in Cochin International Airport Limited. Buying CIAL unlisted shares is quite easy with online stock trading platforms like Stockify, where investors would get comprehensive support for pre-IPO stock trading from some of the Industry’s best experts.
