A country’s stock market is a sign of how well the companies and the economy that form the economy work. In the long term, stock prices reflect how well the company is operating in terms of profit, which then affects the overall earnings of the economy. Pakistan stock exchange is a popular choice for investors in Pakistan. Pakistan’s stock market is one of the best stock markets in the world to invest and earn good money.
The stock market is the most profitable business, but in Pakistan, most people are resistant to invest in the stock exchange. The basic issue of investing in the Pakistan stock exchange is the political situation of the country. Many people earn good money because of the share they bought in the stock market.
Stock Exchange is the place where you can buy shares from the companies for investment. There are two types of companies, one is Private limited companies which are owned by the individual, and the other is public limited companies that are listed in the stock market.
How does Pakistan Stock Exchange Works
Stock markets all over the world work the same way you can buy a stock and, if their value goes up, sell them. Suppose you buy a stock for 10 rupees, and after 5 hours, their value will increase to 10.5 rupees, which means you earn a profit of 0.5 rupees, remember that it’s a good profit. If you buy 10000 shares, then you will probably earn Rs 5000, which is a good sum in a country like Pakistan.
Types of Investment in the Stock Market
There are two types of investments in Pakistan stock market.
- Short term investment
- Long term investment
Short Term Investment
Short term investment means the investor buys and sells shares every day when he thinks the market is going up. These types of investors are also known as day traders. These investors can win or lose their investment daily. These traders spend their time analyzing the market conditions they run full-time stock trading.
Long Term Investment
Long term investment means that you keep the stock shares for long enough to sell it at the highest price, or you get dividends every 3 months. This type of investment is good for the people who are busy and have less money, like students, doctors, engineers, and the working community. Stock analysis is very important for investing in Pakistan stock exchange.
Benefits of Investing in Stock Shares
There are many benefits to investing in stock shares. Let take a look at how this investment can be an effective way to earn money. Here are some benefits of investing in Pakistan stock exchange.
1. Capital Gain
Selling a stock share for more than you paid is called capital gains. This happens when a person experiences a significant increase in stock prices and is one of the long-term goals of investing in stocks.
Listing shares are inherently a very liquid product and can be quickly bought and sold through an exchange. There is no need to engage a broker or purchase at a relatively low price compared to other financial products. When you trade on the exchange, you can also sell some parts of the shares without buying back the entire product.
A dividend is a cash payment to shareholders as part of the company’s profit at the end of each financial year. The more interest in your investment, the more money you will receive.
4. Shareholders Benefits
Some of the listed limited shareholder companies in various market sectors, including entertainment, retail, hotel, and financial services, offer shareholders big discounts when purchasing goods or services from companies or their subsidiaries. To get this benefit, many stock shares had to be owned.
Also Read: Step by Step Procedure of Import and Export
Key Points of Investing in Pakistan Stock Exchange
The investors who invest in stock shares need to pay attention to the following key points to avoid fraud or problems while investing Pakistan stock exchange.
- Verify the legality of the broker and brokerage house before investing.
- Always use a cross cheque to make payment in the name of the broker or brokerage house.
- Never sign any cheque or blank document at any cost.
- Investors must ensure the following in the transaction slip:
Name and number of securities.
2. Date of order execution.
3. Type of transaction (bought or sold and ready, forward, or spot).
4. The price at which the transaction is made and the commission that broker or brokerage house charged.
- Keep evidence of the following documents:
Copy of account opening form duly signed.
2. Evidence of the payment made to or received from the broker or brokerage house.
3. Written trade confirmations received from the broker or brokerage house daily.
4. Account and subaccount statement.
5. Any communication between the broker or brokerage house and the investor.