Shocking Reality of Pakistan Stock Exchange (PSX) .What you definitely not know !!!

PSX 100
As we all know about Pakistan Stock Exchange (formerly Karachi Stock Exchange) is a trading spot where investors buy stocks of companies and companies benefit from them by raising money from public and giving them dividends and Capital Gains in return.
During recent times,We talk alot about PSX in news,Nawaz Sharif boasted about PSX going up by this much points and now its down to this much.
But do we know what we are listening and what actually is ?
559 companies are listed on PSX but we only talk about the top 100 and not the rest 459.
It creates a confusion as when PSX Index is down ,We have a feeling that the whole market is down but actually something else is going on.
Its just a sample size which reflects the whole stock exchange but take for example out of a population of 20 cr in Pakistan we take a sample of 100 people from different cities of Pakistan and ask them who they want to vote for PM in the next election and around 90% say that they think PTI will win but what if PMLN wins.
Will it be okay to say that only 100people reflect the opinion of all 20cr people or not?
No,it wont as the sample is just to get an idea and it not always give a true picture.
Same is with the case with PSX , If the market is up or down, it doesn’t matter,You don’t need to invest only in the top 100 but others as well.
To create changes in the market,these agents who work for the government start trading top100 stocks heavily and the market goes up,share prices go up and similarly when they want the market to be bearish they trade in other stocks.
We as an investor would buy, say, only 300 shares of Unilever and the share price of it is 8500 so your investment will be 25,50,000 which is a huge investment in a single stock but these agents buy and sell close to 2000 shares so it creates a ripple in the market.
Dont confuse yourself before investing and invest wisely.
If you want me to give tips on “How to invest in Stock Market” please comment below.

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