Financial literacy is lacking in Pakistan—only 2.4% of the Pakistani population has an adequate grasp of financial concepts. The lack of financial knowledge leads to more and more people falling for financial scams and losing their hard-earned money. It’s no surprise that Pakistanis lost one billion rupees in an online investment scam in 2021.

While everyone has considered making investments at some point, the problem is that they require a lot of time, dedication and financial education so it’s better to have professionals take care of things. If you don’t want to make your money work for you instead of losing it, continue reading this article to learn about four investment mistakes you should avoid.

1.    Setting High Expectations

Typically you’ll create a diversified portfolio, balancing risk and return. But, even after creating a well-diversified portfolio, there’s no definite way to tell what returns the market will yield.

It’s reasonable not to set too many expectations with your portfolio. That doesn’t mean you should invest in a poor or highly risky portfolio. The catch here is to be careful with what to expect. Don’t set your expectations based on what others expect from the market. Nobody else can determine a reasonable return for you without understanding your goals, current asset allocation, and your expectations.

Investing in NBP’s money market fund is a great way to financially secure your family’s future.

2.    Lack of Diversification

The optimal way to get competitive returns is by diversifying your investments, which minimizes the risk associated with centralizing your investment on one single asset.

You should have adequate diversification—not too much and not too little. Strike a balanced portfolio and seek professional advice. NBP Funds enable you to minimize financial risks by investing in various securities, allowing you to diversify your investments.

3.    Investing With Emotions

Rather than looking at financial indicators, many individuals in Pakistan invest their money using their gut feeling. However, investing with emotions won’t work when your luck runs out. We recommend you look at financial indicators before making a long-term investment.

If you don’t have the technical knowledge, you can always reach out to financial experts at NBP Funds who can help you out at every step.

4.    Irregular Investments

Accumulating a large amount in your bank account decreases the real value of your wealth because of increasing inflation. Hence, we recommend you regularly invest your money to increase your wealth. It gives you an option of accumulating wealth over a period of time, while allowing you to benefit off cost averaging, which reduces your average buying cost and hence giving you a potentially higher return over a long period of time.

Are you ready to invest? Reach out to the experts at NBP Funds — the leading asset management company operating in Pakistan. NBP can guide you on income opportunity funds, retirement planning, and much more.

Get in touch with them today for more details.

Disclaimer: All investments in mutual funds are subject to market risk. Past performance is not necessarily indicative of future results. Please read the Offering Documents to understand the investment policies and the risks involved. NBP Funds or any of its sales representative cannot guarantee preservation / protection of capital and / or expected returns / profit on investments. The use of the name and logo of National Bank of Pakistan does not mean that it is responsible for the liabilities/ obligations of the Company (NBP Fund Management Limited) or any investment scheme managed by it.