Comments on: Investing for Karachiites: Motivation aka Why Should I Invest?

By: Wasim Abbas

Wasim Abbas — Thu, 22 Nov 2007 14:00:25 +0000

aslaamoalaikum

bhaiyo

Wasim Abbas naam hai mera, karachi main rehne ka ittefaq to nahi hua ab tak, taaham kuch din ruka zaroor hoon wahaan, urdu zabaan se,urdu bolne walo se aur karachi se behad mohabat hai k yeh teeno pakistan ki jaan hain.

brother here you have provided us with the excel sheet, thanks a lot for that, but it would be very very appreciable if you could advise on some prospective investment fields for people like me who would be able to save a mere 200,000/- a year. would you mind helping in this regard as to where investment with this much amount can be made to make a profit as depicted by your excel sheet.

khush rahiye aap sab. sada qayim rahe hamare shehr ki roshniyan aur sada qayim rahe hamara Pakistan.

waslaam

By: wakeup

wakeup — Sat, 17 Nov 2007 00:18:37 +0000

But the most important is the WILL , THAT also legal.

If you dont have LEGAL WILL, in western world you loose all your money in bank and other properry to govenrnment. you children and immediate family get zero.

And alos in Islam you have to have a wasehat legal will, to have every thing in order.

as far as investments are concern.

Life is too short for a 20 years bond or stock dividends.

I say buy real estate and have a legal will. put the property on rent. here you are the safest investment.

Or if you want fool proof buy GOLD COINS BARS OR BISCUITS. YOU are all set for life.

By: fahmed

fahmed — Fri, 16 Nov 2007 20:07:50 +0000

the deadline has passed but GEO is still on but not giving any news….sports programmee…etc

By: fahmed

fahmed — Fri, 16 Nov 2007 19:57:40 +0000

geo will end transmission in UAE in 4 minutes!!!

By: fahmed

fahmed — Fri, 16 Nov 2007 19:49:25 +0000

UAE GOVT SHUTS DOWN GEO TV IN UAE.

Today lastday of GEO!!!!!!!!!!!!!!!!!!!!

Simply can believe it!!!

By: Obi Wan Kenobi

Obi Wan Kenobi — Fri, 16 Nov 2007 17:28:52 +0000

Dee, the point is “greed” for the lack of better word is good :-)

By the way if you put your money in stock market then never forget that the market can be wrong for longer than you can be solvent.

By: Dee

Dee — Fri, 16 Nov 2007 17:09:11 +0000

Obiwan…..> Risk translates differently for you than what it is for me or to other folks.If you feel comforable puting 100% savings on stocks then its fine and even if you loose everything you have other means(your salary) to compensate for the loss.Even if i put 100% of my savings and i loose every single penny i will be okay as i also have safety coushion to fall onto.
But there lies a problem for those who do not have a safety net such as source of income and if they loose 100% then this would be a devastating for them.Risk is a double edged sword it can swing in favor or against for you.
Dee

By: Obi Wan Kenobi

Obi Wan Kenobi — Fri, 16 Nov 2007 15:17:32 +0000

I guess I am a high risk taker. My 100% savings is in stocks and options but then I don’t worry too much about money. In fact I take loans from banks and put into my portfolio :-) The worst case would be I will lose all money and have to pay the loans from my salary and have to delay my marriage for a year.

By: Dee

Dee — Fri, 16 Nov 2007 14:20:12 +0000

Khurram that spreadsheet looks really complicated. I suggest For starters, talk to your bank first.Most of the banks have very well defined statements and they will be happy to provide you with free financial software for budgeting and investing.If not web has tons of great free software.
King_Faisal””> very well said.Personally i have diversified portfolio.Where i have some long term invsetments with moderate to low risk investments as well as few with high risks.The rule of investment is simple, the sooner you will start the better off you will be in the future.That said you are never too old to start investments.Please do note i am mentioning the term investment Not Saving.If you keep piling up the money under your mattress , you will have savings but less money due to depreciation of money overtime.
Most of all enjoy the life and try to balance your finances.I see my financial portfolio aS a pie and its divided into many sections some for my present(house, car , education etc) , some for my future(pension plan, travelling, cottage in the country etc), some for my family and friends(if they my help) , and some for my community(charity, advocacy etc).
Again investment seems daunting at first but trust me its not that hard.You dont have to do by yourself and there are always professionals if you want to make informed decision.
All the best.
Dee

By: king_faisal

king_faisal — Fri, 16 Nov 2007 10:27:00 +0000

good topic. investment returns depend on future performance of underlying assets. so all investments are risky including investments in government bonds because no one can identify the future. therefore the first thing average investor needs to do is to identify his or her risk tolerance i.e. how much money can you afford to lose in the short run? investors who are in the early stages of their career usually should take higher risks with their investments because they have alternate source of income i.e. their jobs should their investments perform poorly in the short run. investors who have retired usually have a very low risk tolerance because not having a job, income from investments is their primary means for survival.

one of the most important principles of investment is that higher the returns higher the risk. in pakistan, the safest investment instruments would be govt savings bonds while the riskiest investments for average investors would be stocks. recently national commodity exchange has started functioning in karachi that can give investors an exposure to potentially profitable but highly volatile commodity sector.

to diversify risk, most investors should hold a variety of instruments ranging from govt bonds to stocks in their portfolio. those with higher risk tolerance should have a higher proportion of their assets in stocks. those who have little knowledge of stock investing and underlying fundamentals of different industry should get exposure to stocks through mutual funds run by reputable institutions.

as far as investing in karachi is concerned, karachi is one of the cheapest cities in the world when you look at metrics such as real estate values. also kse still is one of the cheapest stock markets in the world. before we get bullish on karachi though, question we should ask is how safe will our investments be in karachi be it real estate or stocks? i think if we have political stability over the next few years, then our investments should yield handsome returns – higher than those that can be achieved from most outside markets. otoh if we see political tamasha of the sorts seen in the 90′s, then i am afraid we will lose our shirts.

if i had a crystal ball and could forecast political stability, i would be buying real estate in karachi especially in non-fashionable locations such as n.nazimabad. given the cheap valuation, population pressure and very attractive location of karachi in regional terms, real estate prices are only headed one way. if only we can have political stability.
.