My journey into the world of stocks!

Stocks: as in shares traded in the stock exchange. Yes this blog is about investing in the stock market. But more about a layman's experience and how you can do it too! 

I first stumbled into the world of stocks about 8 years back when I subscribed for an IPO of a power company. I had no background knowledge about stock markets and how shares were traded. A friend got me the subscription form and filled it herself. I was only interested as she told me that I would make profit on my investment and would be able to buy a new phone! So I got the shares and sold them after 6 months making quite a hefty profit. It was a remarkable achievement for someone who never had a clue about the stock market. It also appealed to me as a means to make some extra money. 

After that one transaction and few more, I took a break due to my job and family commitments. Meanwhile I kept saving some in mutual funds, though a very meagre amount!  During this time my brokerage company stayed in touch calling me frequently asking when would I be putting in money again. It was only last year that it occurred to me that I must start trading again and I am so glad I did! I took out my savings, sold some gold which actually depreciated over time and put them all in the brokerage account. Since my first buy was a power company I bought my first shares of a power company again. I struggled to understand local terms like "laoo maal" "dehaan", "tezi" "mandee" "item" whenever I spoke to my broker but it was a fun learning experience and now even I can proudly speak that lingo :)

My biggest learning from trading is that only the optimists can survive, its not a place for pessimists. When you buy a stock it is just like buying a little part of the company attached to it. When the company will make profit you will too and vice versa. When buying a particular share there are fundamentals and then there are technicals but above all there is a sentimental feel to it. I very strongly believe in my gut feel which lead my decisions. As long as you are well informed, have done all possible research and know what is happening on the economic front its very rare that you will end up making a wrong decision. A lot of people think of the stock market as an up scale casino and are hesitant to enter as they merely think of it as a gambling platform. This concept is very outdated and misleading. All the stocks traded in the market have a company behind them and more so have a story linked to them. Investing in the right stocks can offer capital growth as well as a role in the overall economic well being of the country. 

The best area to put your money is into the blue chips. Obviously once you get the hang of it you can look for timely opportunities as they arise and shift exposure from one sector to the other but blue chips are always a safe bet. It is advisable to invest in a company whose business you actually understand or whose products you use commonly; for instance food producers, textiles mills, electricity providers, cement manufacturers etc.  There is a lot of information and research available about stocks online. Social media is making it more accessible for people like us by giving real time assistance to new comers. There are specialised groups which are educating new investors and also mentors who can help you understand market dynamics. I am lucky to be connected to the right people for guidance and support and have gained a lot of insight by reading research reports and various discussions. 

We as a nation do not have a saving culture. In fact our savings to GDP ratio is the lowest in the region. This is primarily because of lack of awareness among people and uncertainty on the economic/security situation. But saving can start from as little as Rs. 2000 per month which can grow into Rs. 24,000 in one year, plus if you are investing the amount into stocks it can easily grow to about 20%-30% (purely based on my experience)

Being an optimist I am really looking forward to the future of Pakistan which looks very bright to me. The economic front looks promising with new projects in pipeline, improving law and order situation and a democratic government completing its full term. The interest rate is at its lowest in the history of Pakistan, giving a clear message to get money out of bank accounts and invest in businesses. The biggest investment is coming in infrastructure and electricity sectors, macros look good and its just a matter of time when the effects will reach the common man. With strict regulations and checks in place the stock exchange can be very lucrative for small investors looking for better returns.This is the right time to start investing in our own market which is destined to develop into one of the world's best emerging market.