Well, as a Muslim and a Communist I will never invest in stocks.
But I will ask @Irfan Baloch ( the OP ) and other Pakistani members of PDF that instead of investing in the traditional safe places they pool their money and create a small venture capital fund to invest in Pakistanis who want to set up new or fundamental technologies like agri tech ( consult @ps3linux ), fabless microprocessor design company ( you can take onboard @fitpOsitive ), computer operating system ( @Baz has a project on going at facebook.com/MarkhorOS ), space rocket design ( you will have to convince the government that other countries including India have allowed private groups to enter this segment ), useful robotics ( for example, Google "Bandicoot robot" ), new power sources ( for instance, NDB - Nano Diamond Battery ), wearable computers, nano computing, nano biology etc etc.
Do not think that what I wrote are too ambitious to be realistic. Let it be risky. Will help Pakistan leapfrog manifold. I myself will be setting up a company in three of the above subjects.
Thanks for tagging me, I am not frequenting the forum due to many reasons. Nonetheless elsewhere on this forum I discussed pretty much in detail that every investment carries risk and I explained risks there. So today something on investment.
First rule, Risk is inherent to investment my job as a financial planner/advisor is not to eliminate the risk rather manage it, it is otherwise called as Risk/reward Theory.
Investment is virtually of hundreds of type I will outline a few Real estate, commodities (gold, silver, precious metals, oil, etc etc), options, debt, equities and many others.
Whatever one chooses it must have few components it must take into account the risk tolerance of the investor, the tenure of investment.
Investment must be divided between short term medium term and long term. Equities are the best platform for medium and long term investment. One should pick and choose equities on two basis growth potential (capital gains due to increase in share price) and dividend paying stock.
Short term bond/mutual funds/Govt papers are all good enough.
Market sentiment is dangerous terminology people who are influenced by sentiment are usually the ones who loose on investment. If the investment is for short term then getting out is a good choice, but if it is for long term equity market eventually recovers.
In Pakistan we don't have true investment advisors CFA or equity brokers or chartered accountants or tax consultant tend to pose as such but they are not trained for the same, people like me are very few in numbers and since we don't have a proper legal framework for the same thus people like me stay away from advising people because my experience in developing countries is that people fail to grasp the fact that despite advisory it is them who finally take the decision. Anyways.
If the investment vehicle is not a registered one with the regulator or financial authority then you are in deep sh*t. If its not a listed security I prefer to stay away from it, if there is too many layer of paper I stay away from it (case in point sub prime crisis).
PE/VC are options but you need more capital and many of them are basically frauds.
Personally I prefer debt instruments sukuk to be specific for short term and if I want to start betting then covered calls are the way to go, equities and metals (silver preferably, gold sometimes) along leaps for long term.
Real estate investment somehow or the other I hate it, just because few people could buy it it becomes expensive for those who need it, simple demand and supply curve.
I hope this serves as a beginning point for users reading it, I can off and on give broad outline to investment but I never give out which scrips to invest in and for how long.
Personally I prefer to manage my portfolio and those I advise the liquid portion on the basis of CPPI.