A stupid guide to Investing in the Pakistan Stock Exchange (PSX)

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Investing in the Pakistan Stock Exchange (PSX) is your only way to break out of the endless cycles of inflation and economic uncertainty.

  • Most companies have their incomes in USD - $$$$ depreciation proof
  • Historical performance is literally 🚀 compared to all other asset classes
  • It is incredibly easy to find great companies at greater prices due to how our economic cycles work

wtf is stock bro?

A stock is basically a piece of ownership in a company.

When you buy a stock, you own a tiny part of that company and will benefit if the company does well.

Sahulat Account vs. Individual Account

You'll get two options when trying to open an account with a broker - Sahulat & a proper individual account. Here are the limitations for the Sahulat account:

  1. You get an upper cap of 1 million rupees
  2. You do not get access to most of the advanced tools that day traders would love.
  3. Converting the account to an individual account is a giant pain - i did it, it took a month.

Which broker should I pick?

It doesn't matter. You can have multiple accounts with multiple brokers. Just pick one of the big ones from this list and you're golden: https://www.psx.com.pk/psx/resources-and-tools/investors/top-10-brokers

Next Capital is also working on a more modern experience: Finqalab. But the app lacks a ton of features that other brokers already have.

Pick your poison. Regardless of what broker you go with, you'll probably need to record your trades manually on a third-party app like Sarmaaya or Investify, both are decent but the former has better data.

Avoid Day Trading

Your purpose is to accumulate wealth and to let your money work for you. Day trading is a full time job and unless you give it the respect that it deserves, you will lose money and you will lose it all.

Instead of day trading, consider swing trades:

  1. Buy companies when they are on sale.
  2. Sell them if you were wrong about the sale.
  3. Practice makes perfect.

Divide your investments

This is how I do it - but you should probably do something that fits your appetite.

  • Safe & Stable Stocks (70%) - I'm holding MARI
  • Growth Stocks (30%) - I'm holding SAZEW

A good place to start as a beginner is to put 70% into stable and reliable companies while you use the remaining 30% to learn about the market by researching and finding opportunities.

Posted Jun 3, 2024, 11:12 PM UTC

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