Pakistan’s economy has been a victim of high inflation, unemployment, and lower growth for over a decade now. Considering Pakistan’s current economic situation, one must diversify one’s investment portfolio to mitigate the impact of economic instability on the end consumer. Pakistan offers a variety of investment opportunities despite struggling with its economy. Some of the best investment opportunities in Pakistan are:
Investing in stocks:
Investing in stocks is one of the most reliable investment opportunities in Pakistan. It is the best way to increase your capital. However, investing in stocks can be associated with high risk and high returns. Investing in stocks can give investors a stream of income through profits (dividends). Numerous companies listed on the PSX disperse profits to their shareholders, permitting investors to get standard payouts based on the company’s benefits. This profit can supplement one’s cash stream or be reinvested to advance the speculation (investment) portfolio. According to PSX, the average annual returns for investors in the last ten years are 10.58%.
Although investing in stocks is highly beneficial, knowing the potential risk associated with it is pertinent. Prices are subject to change and are affected by many factors, including economic sentiment, markets, geopolitical events, and company-specific news. To mitigate the risk associated with stocks, one must diversify one’s investment. It can be done by spreading investment across various sectors and companies. By adopting this risk management strategy, one can get the most out of investing in stocks.
Investing in Mutual funds:
A mutual fund is an investment managed by financial managers that pools the money of many investors to purchase different types of stocks, bonds, and other securities. A financial manager manages this fund and provides investors with an easy way to access various types of businesses without owning capital. This allows small investors to acquire a wide range of assets that would be difficult to obtain on their own. According to MUAF, the majority of mutual funds give a return of around 20% annually.
Investments in mutual funds can offer a variety of advantages; mutual funds create a diverse portfolio by combining the investments of many people. This diversification spreads risk across multiple assets and reduces the impact of a single security’s performance on the entire portfolio. Apart from that, Mutual funds provide a way to make investments in a variety of securities, including stocks, bonds, and financial instruments that may be difficult for an investor to manage independently. In addition to that, investing in mutual funds is relatively affordable because it requires a small amount of investment, making them accessible to a broader range of investors.
Investing in Real Estate:
Investing in the real estate business is one of the most lucrative businesses in Pakistan. With the continuously increasing population and urbanization fostering the need for real estate businesses in Pakistan, the real estate business consists of residential, commercial, and industrial properties bearing enormous potential for investment.
The increasing population and rural-urban migration increased the demand for housing in Pakistan, so investing in residential properties like flats, houses, etc., can yield profit and asset appreciation over time. Big cities such as Karachi, Lahore, and. Islamabad provide commercial real estate such as offices, shops, and warehouses. Commercial real estate provides a stable rental income, especially in prime locations.
Although real estate is highly profitable, it also has some constraints, like it needs high investment starting from one million. Moreover, some other factors like legal complexities, property documentation, regulatory compliance, and fluctuating property prices may challenge this business and can affect return on investment. In a nutshell, investing in real estate in Pakistan can provide a great way to build wealth and income. However, before making an investment decision, sound research, understanding of the local market, compliance with the legal process, and risk assessment should be made. Consulting real estate experts and financial advisors can also provide insight into the real estate market in Pakistan.
Invest in Gold:
Gold is one of the most valuable assets in the world. It is beneficial to invest in gold because it acts as a safeguard against economic uncertainties, like inflation, and also serves as a means for investment portfolio diversification. It can be an attractive option to invest in gold in Pakistan due to its importance as a store value in times of economic uncertainty. Most investors choose to invest in gold as it protects against inflation and currency fluctuations and for long-term returns. In Pakistan, most individuals and investors prefer to buy physical gold, like jewelry, gold coins, and bars, from various jewelry shops or banks. There is also an indirect method of investing in gold i.e. gold ETFs (Exchange Traded Funds). These are a basket of investments pooled by many investors, and they can be bought and sold like stocks.
Why invest in Gold?
It historically served as a store of value.
It serves as a hedge against economic uncertainties.
It also serves as a haven asset at the time of crisis.
It is a highly liquid asset and can be converted at any due to its high demand.
In-depth study and knowledge-based investment in gold ETFs can give very high returns.
Investing in Photography Business:
Photography is a small-scale business, but it has enormous potential. As we know, photography is a skill that can be used to earn up to lacs per month. Photography requires minimal investment; you have to buy a good camera and start translating your skills into a profitable job. You can earn by working in casual events, birthdays, weddings, etc. The boom of social media has significantly increased the demand for high-quality visual content. The wedding industry, in particular, offers a valuable opportunity to photographers as weddings are celebrated with professional documentation. In addition, commercial photography for advertising, fashion, product shooting, and corporate events has also gained momentum, offering photographers unique opportunities according to various customer needs.
Fixed deposits:
Investing your money in fixed deposits is a lucrative business in Pakistan. As it assures you a fixed return on investment upon its maturity. This is a long-term investment plan that offers a fixed return at an interest rate as well as saving your money. In the first place, Deposits are safe and stable investment options provided by banks, where people can deposit money at an interest rate for a certain period. These deposits are considered low risk as banks back them and provide a guaranteed return on investment.
Additionally, the interest rates of term deposits are higher than savings accounts, making them a good option for people who want to earn income from their savings. The current interest rate set by SBP is 22%, which is among the highest. It also offers flexibility over time, allowing investors to choose the investment period according to their financial goals. Also, FDs are very feasible to use, and they can be used as savings accounts and earn income passively.
In a nutshell, these provide a haven to get a positive return on investment. Also, fixed deposits in Pakistan are easy to use and can be used as a savings account or earn passive income while saving. Overall, they provide a safe way for people to grow their savings and earn a good return on their investments.
Invest in Print-On-Demand Business:
Print-on-demand business is an innovative start-up idea bearing the potential for growth and scaling. This idea involves the customization of products (shirts, caps, bags, etc.) as per the customer’s requirements. This business needs low investment as it bears lesser investment costs because it eliminates inventory costs and other upfront costs. In this business, you do not need to hold a huge inventory; designs are produced only when an order is received. To set footprints in this business, you need to hire a designer and build your niche, like printing/designing on t-shirts only or similar.
There are specific steps to take before starting a POD business
Find your niche; research your target market and competition
Identify the products that you want to sell
Register your business with a POD provider to connect your store
Select designs for your selected niche and upload these designs on your storefront
Receive an order and sell the product. Remember to keep tracking your profits because data-driven information can be beneficial for decision-making
Bottom Line
Despite struggling with its economy, the country still offers a variety of investment opportunities. Still, there is a plethora of investment opportunities available in Pakistan. One can live a better life by exploring these options in Pakistan. Investment options range from as low as 100 rupees (like stocks) up to some hundred million (real estate) in Pakistan.
