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Abid Ali Awan - 22 Jan, 2026
7 Costly Investing Mistakes Pakistani Beginners Make
Most first year investing losses are process losses, not intelligence losses. New investors usually know what they should do, but they enter trades without a system for risk, records, and behavior. This guide expands the seven most common mistakes for Pakistani beginners and gives a direct fix for each one. 1) No emergency buffer If one medical bill or one income delay can force a sale, your portfolio is not really long-term capital. It is short-term cash with market risk. Build emergency cash first, then invest. Keep this buffer outside your investing account so market noise does not affect your ability to pay monthly bills. 2) Investing borrowed money Debt creates a fixed obligation. Equity returns are variable. When you combine fixed obligations with variable outcomes, stress rises and decision quality falls. If you are paying high interest consumer debt, paying it down is often a guaranteed return relative to risky market exposure. 3) Following random tips SECP has repeatedly warned about fraudulent social media groups and unauthorized trading platforms that promise quick profits. Many retail losses start with trust in screenshots, not in verified documentation. Before any trade, verify broker status and avoid any channel that asks for private payments, account sharing, or urgent action. 4) Overtrading Overtrading increases friction costs, emotional fatigue, and timing mistakes. You feel busy, but portfolio quality often falls. Use a fixed schedule for review, such as monthly execution and quarterly evaluation. Activity is not the same as progress. 5) No position sizing rules One oversized position can erase months of disciplined saving. Beginners often size positions from excitement, not from risk budget. Set maximum exposure rules before you enter any position. A simple start is to cap any single equity position at a pre-decided share of total portfolio value. 6) Ignoring diversification Concentration can look brilliant in one cycle and painful in the next cycle. Diversification does not remove losses, but it reduces the chance that one theme breaks your full plan. Use a mix of assets and sectors that reflects your time horizon and risk capacity. 7) Quitting after one bad quarter Compounding rewards continuity. Many investors stop contributions after drawdowns and restart only after prices recover. A better rule is contribution continuity: invest on schedule unless your income or emergency situation changes. A safer execution checklist for Pakistan investorsDeal only with licensed and verifiable market entities. Open and operate accounts in your own name. Keep written records of all instructions and confirmations. Use regular contributions instead of tip based lump sums. Review portfolio policy quarterly, not every hour.Red flags that deserve immediate pauseGuaranteed returns or "no risk" claims. Pressure to move money quickly through personal accounts. Advisory groups that avoid written disclosures. Requests to share login credentials or OTP codes.Final takeaway Beginner success is mostly behavior and process. If you protect downside, keep contributions consistent, and verify who you are dealing with, your odds improve materially over a full cycle. Further readingSECP alert on fraudulent social media and WhatsApp groups SECP caution on illegal offshore trading platforms PSX Investor Awareness Guide JamaPunji public awareness message for investors Investor.gov on building wealth through saving and investing
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