Why stock exchange is still a mystery for a common Pakistani
Most of the Pakistanis invest in real estate.
By purchasing land and property people are placing their money, work, capital in land and property, though it benefits the individual and their family on a personal level but on a macro level the economy faces problems.
The flow of money becomes stagnant. The economy performs well when the flow of money is continuous in a country. This continuous flow is possible when people invest more in the stock exchange than in the property.
Financial illiteracy is the lack of possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources.
This, in my eyes, is one of the reasons that people in Pakistan are not able to make the most out of their finances.
With the help of proper guidance programs financial education can be imparted on individuals and youth.
Market instability is also the reason people do not want to invest in the stock market. Why invest in something where rate of getting return isn’t sure?
Market stability analysis is the impact of systematic and systemic shocks on developed and emerging market stocks indices in normal and extreme market situations.
Experience of people who have been investing in the stock market counts a lot.
One of the investors had shared his experience by saying “I have been investing in Pakistan stock market for around 5 years now and I can say it has been an overwhelming experience.
I have invested in many other places and countries too, but the returns generated by the Pakistan stock market dwarf everything else (combined).”
Most of the Pakistani’s have negative experience in stock trading. Reasons can be many including borrowed money, market crash, misleading brokers and such.
Based on the information provided by the experienced personnel, people resist to invest in the stock market and the foremost reason is that many in Pakistan consider stock trading as gambling.
In case of Pakistan only economic variables are observed as causes to high economic volatility while political variables are complete ignored. Political factor also affect the investors to hold positions and keep themselves from investing in the stock market.
Government of Pakistan should take productive measures to stabilize the stock exchange of Pakistan and to educate and attract new investors from all over Pakistan.
This will not only motivate common Pakistani to make better investing decisions but also enhance Pakistan’s economy.