3 Types of Investors in Pakistan October 19, 2017 Posted By MCB - Arif Habib
Just like there are numerous avenues of investments available, the behavior of every investor in Pakistan varies as well. The way people invest is affected by a number of factors which could be cultural, economical or even social. People in Pakistan are usually apprehensive about investing capital in any venture, which is mostly due to the fact that they are fearful of frauds and scams. For this reason, investments in Pakistan are primarily governed by the willingness of an investor to take a risk and the duration for which the money can be held in investment.
Based on their willingness to take risks, there are three basic types of investors in Pakistan.
The Safe Players:
The Safe Players shy away from the prospect of high risks. When investing in Mutual Funds, the Safe Players steer clear of the stock market and park their capital amount into Money Market or Income Funds with the objective of keeping their principal investment safe. Their investment goals usually include meeting their expected liquidity needs in the near future or short term goals such as purchases/vacations/tuitions. Safe Players in Pakistan also save by participating in their neighborhood Ballot Committees which are not risky at all and gives them their initial investment amount even if they don’t get any profits.
The Moderates are usually disposed towards taking a moderate amount of risk. Low returns dont attract them much and they don’t have the appetite to take adventurous risks in life. The Moderates in Pakistan tend to invest in Gold, Saving Accounts or Saving Certificates in banks. These options provide decent amounts of profit and also keep their initial capital safe. In terms of Mutual Funds, Moderates can easily invest in Asset Allocation Funds which invest one ratio of the capital into the Stock Market and the other in Fixed Income Funds. Based on the social, political and economic situation the Fund Managers keep re-allocating the funds with the target of providing higher absolute returns. The Moderates are content with having their Fund Managers take care of all the logistics while they sit back and wait for their returns.
The Adventurers don’t mind taking big risks with their capital because they realize that risks often pay off well. They usually invest in Equity Funds which yield returns in the longer run to meet bigger goals such as buying a house or save for their child’s education or marriage. They also invest in currency which has the tendency to earn high profits when their values rise. This group of investors actively monitors their investments and their expected returns.
If you are confused about how to start your investing journey, all you need to do is figure out which type of investor you are and then decide a fund to invest in accordingly. Get in touch with our Fund Managers to help you for this purpose. Once you figure out which risk profile you fall in you can set your sight on your saving goals and start saving right away.