17 Best Investments in Pakistan for 2023
Discover the top 17 investment opportunities in Pakistan for 2023 with expert analysis to help you make profitable investment decisions.
TABLE OF CONTENTS
After reading this article, you will have the best available answers to the following questions:
- What are the best dividend stocks in Pakistan?
- Where to invest small amounts of money in Pakistan?
- Best way to invest money in Pakistan? Or one of the best ways to start investing
- Finding the best companies to invest in Pakistan.
We propose a simple investment approach/strategy for new investors in Pakistan!
If you are looking to do financial investments in Pakistan you have three options:
- Put or keep your money in a saving account at a bank - they will give you returns at the end of the money but they will be lowest vs the other two options. We have explained all the financial investment possibilities in Pakistan here.
- Put your money into a mutual fund. According to how must risk you want to take, you will have 4 categories to choose from. Here is a detailed article on Mutual Funds and Here is a step-by-step guide to opening a mutual fund account completely online.
- And the third and most lucrative is to buy a few stocks that pay dividends every quarter. They may seem to have a higher risk however they can both go up in price and give you dividends in the meantime.
What is a Financial investment?
Financial Investment means putting your money into an asset that doesn't necessarily have any physical being.
The key difference between real investments and financial investments is that real investments involve physical assets that can be seen and touched, while financial investments involve intangible assets that cannot be seen or touched.
Usually, when you buy real assets you need more upfront capital and may involve more ongoing maintenance and management, while financial investments can often be made with smaller amounts of money and may require less ongoing effort.
Let's discuss the 3rd option i.e. dividend investing in detail now.
What is dividend investing?
Dividend investing is a strategy where you focus to buy stocks in companies that regularly pay out a portion of their profits to their shareholders, called dividends. By investing in these companies, you can earn a regular income stream from the dividends they pay out. Best companies pay out quarterly dividends.
Our Strategy
Only buy high dividend-yielding stocks when you are new!
Forget about all the other strategies. Make dividend income first and then decide if you want to stay stock market investors or not.
How to buy your first dividend stock?
Open an account – of course🙂
Today opening a brokerage account is like opening an easypaisa account. It's easy, fast and online.
Here are links directly to online account opening form pages of some of the best-known brokers in Pakistan
List of best Brokerage Houses in Pakistan that offer digital account opening
Brokerage Houses | Online Account Opening Link |
Intermarket Securities | |
Alfalah CLSA | |
KASB Securities | |
FinPocket |
Find out the best dividend stock
Brokerage account opened? Great!
Now let's see the list of best dividend stocks in Pakistan. This will be the most crucial step and this will decide how much money you will make at the end of the day.
Top dividend-paying stocks in Pakistan
There are many websites that give top dividend stocks but we often use sarmaaya.pk (check the link)
This is what their list looks like as of April 11th 2023!
What does dividend yield % mean?
See this table!
The dividend yield will always be given in % numbers. This means that if you invest Rs1000 in this stock, the stock will pay back Rs337 as a dividend in one full year.
The more the better!
The second stock from the list says that the dividend is 21.84%.
This means that if the company pays out the dividend as it did last year, you will get Rs218 back as a dividend on your Rs1000 investment.
Usually, dividend yields are higher when compared to the returns given by commercial banks or mutual funds.
How much money should you invest in dividend stocks?
You can invest as much money as your risk appetite allows you to.
What is risk appetite?
Risk means the chance of a loss. There is a possibility that something goes wrong with the country or the company that you are invested in and the stock prices come down. If a company shows a loss then it means that the company will not pay dividends.
Risk Appetite means how much risk can you take. If you invest all of your money in stocks understanding that they might come down, it means your risk appetite is high!
You have two options here:
- Invest the money you have on the side in one go
- or make a SIP i.e. invest the same amount of money each month! - we have a detailed eBook on How to do SIP in Pakistan - have a look!
Benefits of InvestKaar’s Dividend only strategy:
Stable income no matter if the market is up or down!
If the market is not doing good, as was the case in the last 5 years, you would have dividends coming in. You can reinvest these in the same stocks or buy something else
Survive Big Falls
Usually, dividend-only stocks genuinely survive big falls in the market. They trade in a range that is acceptable for any new investor and doesn’t take away his confidence
Get better rates in bad times
This also means if you urgently need cash in a bear market, and dividends aren’t enough, you can sell your stock at a reasonable price unlike some cyclical/risky stocks which might be down 40-50% in bear markets
True passive income
Psychologically it will become easy for you to only observe the market when you already have a strategy in place. You will not have to trade excessively every day to make money. Also, by observing you will be able to understand the stock market’s behaviour and see opportunities for capital gains come to you itself.
Either reinvest or spend it on a skill
With the additional earnings via dividends, invest in yourself. Take a few courses to deeply understand the market and how things work. If dividends are coming, the stock market will be paying for your learning.
Remember these rules at all times:
- Invest in small amounts. If you have invested such an amount that you have to open the screen and follow what you own, you are doing it wrong!
- It’s the nature of stocks to go up and come down. Investing in small chunks will get you comfortable with swings – so again, start with a small amount
- For one year, make a systematic plan. If you can save Rs25,000 a month, invest it into stocks having dividends. See them pay you back!
Conclusion:
Going big in the beginning, more often than not, doesn’t work and leaves a bad experience behind.
Make it a lifestyle!
If you have something to ask, drop us a WhatsApp message or write to us. We will help you.
Our aim is to bring retail investors to the market the correct way! We will provide you with guides on how to start investing and the best way to invest, tailored specifically for you!
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This article is just the tip of the iceberg. A lot more understanding is required to choose the best investment for you.
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