Pakistan's financial markets are on fire, but there's one question on every investor's mind: Where should you put your money?

The numbers are staggering. The KSE-100 Index surged 84% in 2024 and is still climbing, while gold jumped by 19.2% after a massive rally.

Pakistan’s financial markets are sizzling hot, but with stocks, gold, and crypto all making headlines, investors are burning a question: Where should you put your money?

The KSE-100 Index soared 84% in 2024 and is still climbing, while gold prices shot up 19.2% after a massive rally. Meanwhile, crypto adoption in Pakistan is booming, with 20 million users reportedly engaging in digital assets.

But as investment avenues multiply, the question remains: What’s the smartest bet? Should you stick with traditional assets like stocks and gold, or is it time to experiment with the volatile world of crypto?

Let’s break down the pros and cons of each asset class and see what experts have to say.

Stocks: The Long-Term Stability

Experts like Mustafa Fahim, an investment banker, advise keeping 60-70% of a portfolio in stocks, especially blue-chip companies and index funds, for long-term stability and solid returns.

Over the years, the PSX has delivered an annualized average return of 20%, making it a reliable choice. However, stocks are known for their volatility, especially in the short term.

This year alone, the KSE-100 Index has shot up 84%, which is an incredible feat. While some analysts predict another 35-40% return in the next year with the IMF review boosting investor confidence, such gains are yet to be seen.

Gold: Safe Haven or Missed Opportunity?

Gold is often the go-to asset in uncertain times. It’s stable, easy to liquidate, and has recently surged past Rs325,000 per tola. But is it the best place to park your money?

Analysts like Shankar Talreja argue that gold’s rally may be slowing down, with future gains likely to be lower than last year.

Historically, gold’s long-term returns pale in comparison to stocks. While it remains a great stabilizer in any portfolio, relying too heavily on it could mean missing out on bigger opportunities.

Crypto: High-Risk, High-Reward

Here’s where things get interesting. Despite being unregulated in Pakistan, crypto has captured massive attention. Reports claim 20 million Pakistanis are using crypto, but here’s the catch—many aren’t investors. They use it for transactions, avoiding banking restrictions.

Experts remain divided. Talreja warns of crypto’s extreme volatility, suggesting that only those comfortable with the risk should allocate a small portion, like 10%, of their portfolio to digital assets.

On the other hand, Fahim believes younger investors can afford to take the risk, especially with Bitcoin, the most established cryptocurrency, being seen as the safest bet.

The Real Issue: Lack of Financial Literacy

So why aren’t more people investing in stocks? One word: education. There’s a deeply ingrained belief in Pakistan that gold and real estate are the best investments.

Meanwhile, financial literacy remains low, and tax concerns discourage many from entering the stock market.

And what about those 20 million crypto users? Fahim believes this figure is misleading. Many people buy and sell crypto for practical reasons, not as an investment strategy.

If Pakistan legalizes crypto, it could see even more adoption—but also taxation, which might change investor sentiment entirely.

The Verdict: What Should You Do?

If you’re looking for stability, gold is a safe bet. If you want steady growth, stocks are the clear winner. And if you’re willing to take a high-risk, high- برابر