The goal behind investing is to gain appreciation in the value of an asset over the time period by giving up the asset in the first place. For instance, a person buys a piece of land for Rs. 100 and then sells that land after a year for Rs. 115. So in the given situation, the person gained about 15% on its invested amount by sacrificing Rs. 100 in the start with an intention to have more after some time period. It is considered that it is always better to invest the ample money you have instead of just keeping it in form of cash as it loses its value over time. By cash losing its value over time is meant by one losing the purchasing power, for instance, over time the flour in Kgs that could be bought back in 2012 for Rs.100 can not be bought in the same quantity for the same Rs. 100 today because of the inflation that prevails over time. Therefore, the best way to maintain one purchasing power one must invest instead of storing money in a locker.

Now the question arises where to invest so that one can generate ample returns based on their needs and priorities. So basically, where to invest varies from person to person as they all have different needs, goals, and risk appetites. In general, investors are divided into three categories based on the level of risk an investor is willing to take. Those categories are risk-averse, risk-neutral, and risk seeker. So based on risk level let’s disuses a few investment ideas in Lahore.

Fixed Income

Investing in corporate and government bonds is basically considered as fixed income. Government bonds are considered as one of the safest investments as the government never defaults. While corporate bonds are riskier and always offer higher returns than government bonds because of higher risk. On the other hand, instead of keeping cash in a locker, it is better to put your money in a saving account where you can earn a suitable return depending on the prevailing KIBOR in the country. Furthermore, one can invest in the prize bonds as well that are offered by the government of Pakistan, but the return depends on the luck of the investor. For instance, the bond of Rs. 750 has a cash prize of around fifteen million rupees. Meanwhile, those bonds can be encashed at any point in time or even used as a substitute for cash.

Stock Market

Another most well-known investment opportunity is to invest in stocks. On average return of the Pakistan Stock Exchange is around 10%. In our country, we have Pakistan Stock Exchange and there are a number of brokerage firms through which anyone can invest in stocks. Pakistan Stock Exchange is a marketplace where 531 companies are listed and provides the general public the opportunity to invest in those companies. In the recent past, Pakistan Stock Exchange had an All-Index Growth of 26% Annual CAGR from 2012-2017. In the past, it was considered to be time taking and inefficient but in the recent past we have seen major developments and trading has become very simple and quite accessible with the help of online trending platforms. In past, all transactions were done through a broker assigned to the investors but now that need is being eliminated with the help of an online trading account where the investor can trade on his own. The biggest perk to investing through stocks exchange is that one can easily diversify his investment. In a general environment making investments in different businesses is very expensive and opportunities are limited. But with the help of the Pakistan Stock Exchange, one gets the opportunity to invest in 531 companies belonging to 36 different sectors with the help of minimal capital requirements. By investing in a number of companies one can diversify their investment easily and this opportunity is only provided by Pakistan Stock Exchange in Pakistan.


Another major option for investors is to invest in commodities like buying precious metals (Gold, Silver, Platinum), petroleum products (Crude Oil, Natural Gas), and currencies. The major plus of investing in commodities is that it provides a sort of hedge against the prevailing inflation in the country but on the other hand it is comparatively more volatile than stocks. According to the past data, commodities have never outperformed the equity market in the long run. To directly invest in the commodities, require a huge amount of capital and also requires storage and other expenses are related to it. To deal with such issues in our country Pakistan Mercantile Exchanged limited provides the services to deal in commodities futures offering various choices of local and worldwide products across numerous asset classes. By investing through Pakistan Mercantile Exchanged limited one doesn’t really have to buy the commodities in physical form and does allow the investors to trade on margin and provide them with liquidity needs.

Real Estate

Real estate investment is considered to be the safest investment opportunity in our country but on the other hand, this market is not as liquid as stocks and commodities and also requires a huge amount of capital to be invested. There is one option that a person can buy real estate and hold it till he gets a good return on investment. On the other hand, there are opportunities provided by real estate investment trusts known as REIT. One can indirectly invest in these REITs and can enjoy the returns without investing huge capital and providing a major effect of diversification. The best part here is that REITs also trade on Pakistan Stocks Exchange and one can easily invest in stocks and indirectly invest in real estate with the help of online trading account services.


Now putting it all in the nutshell, to earn more one must invest more and the best investment is considered the one in which your risk is minimized, and diversifying your investment helps you minimize the risk you face. First of all, one needs to allocate a percentage to every category they are considering investing in based on their risk appetite and liquidity needs. While investing in stocks it is said that investing in 14 different companies provides a good amount of diversification to the investors and along with investing in stocks, putting money in commodities and bonds provides a more diversification effect and allows the investor the get returns based on their risk appetite.