Posted On September 21, 2021
“In investing, what is comfortable is rarely profitable.” — Robert Arnott.
Investment is a real game-changer in one’s life. With profitable and wise investing decisions, one can achieve financial stability at a very high pace. There are many investment opportunities available in Pakistan. Each investment opportunity comes with its own set of pros and cons. Some of the most common investment opportunities in Pakistan include forex trading and real estate.
‘Forex trading versus Real estate’ is a topic that has been under discussion in the investment market for years now. Each mode of investment comes with its advantages and disadvantages.
If you are a new investor about to make your first investment, you need to go through this blog.
In this blog, we bring you a concise yet very informative list of things you need to know about ‘Forex trading versus Real estate’. To learn more about the comparison, keep reading.
According to Investopedia:
The foreign exchange market is where currencies are traded. Currencies are essential because they enable the purchase of goods and services locally and internationally as well. International currencies are a widespread investment opportunity in Pakistan because they are needed to be exchanged to conduct foreign trade and business.
Things you need to know about the forex trading market:
“Money is just something you need in case you do not die tomorrow. Let this be a reminder for you not to obsess over profits and losses. In whatever you do, strive for enjoyment, focus, contentment, humility, openness… Paradoxically (and as an unintended consequence) your trading performance will improve significantly.”
Forex trading works differently than real estate. In forex trading, traders in the market invest in different international currencies through a broker or facilitator. Sometimes, people even invest in currencies without taking help from intermediaries. People usually prefer investing in international currencies that are strong and perform well in the global market. For example, people prefer investing in dollars, euros and dinars because these currencies are solid and faceless fluctuation than other currencies.
Pros of investing in forex trading:
- The forex market is an investment that has the highest form of liquidity. This means that if you have to exchange your investment, you do not have to wait longer for it. Take your currency to the nearest currency exchange centre and get the money as soon as possible.
So, if you are someone who wants to invest his hard-earned cash in something that has high liquidity, we suggest you go for forex.
- It is straightforward to enter into the forex market. You need to have basic knowledge of currencies and how they work, and you are good to go. Also, it is easy to take a break from forex trading.
For example, if your target forex market is down, you can participate on the next trading day. This way, you will not have to invest in something that is not profitable for you at the moment.
- Forex trading comes with high availability. This means that as an investor, you will have access to the forex trading market 24/7. The trading starts every day in Australia and ends in New York. The major countries with big trading centres are Singapore, France, Hong Kong, United Kingdom, Australia, the USA, and Germany. This also means that forex trading comes with diversification, and one can continually expand his portfolio.
Cons of investing in forex trading:
- In terms of profits, forex trading comes with little earnings as compared to real estate. Also, the forex trading market fluctuates and depends on a lot of external factors such as economic conditions of the country.
- Also, you need to keep a check on the currencies and their past and present trends. This is important to ensure that you eliminate the risks that go along with it. In short, forex trading comes with a lot of attention and focus.
But land is land, and it’s safer than the stocks and bonds of Wall Street swindlers. – Eugene O’neill
Before the comparative analysis between real estate and forex trading, it is essential to understand the things you need to know about real estate.
Things you need to know about the real estate market:
As compared to the forex trading market, the real estate market functions differently. Unlike forex trading, everything in real estate is bigger. Hence, real estate requires more considerable capital for investment.
Also, with enormous investment comes more significant risks and more uncertainty. But it should also be noted that real estate comes with many perks and benefits that are not usually enjoyed in forex trading. Real estate allows you to own a tangible asset. That tangible asset can be used in many ways as well. Also, real estate gives you greater returns and more security in the long term.
Pros of investing in real estate:
Some of the significant advantages of real estate are mentioned below.
- Real estate is one of the few assets in the world whose value appreciates over time. The land is an asset whose demand is increasing by leaps and bounds due to the global population increase. Hence, real estate is always in demand, and real estate will also remain fruitful for investors.
- Real estate is one of the best sources to generate revenue. You can earn money in real estate through renting, house flipping, buying plots and commercial properties.
- It is seen that real estate has seen more technological advances than forex trading. Today, real estate has been improved by leaps and bounds due to advancements in the science of IT. Today, investors can easily connect to buyers, renters, and even potential business partners through online portals and mobile applications.
Cons of investing in real estate:
- Real estate comes with low liquidity. This means that if you want to sell your property for cash, you may require some time for it.
- It is a common misconception that real estate is the gateway to financial freedom. This concept is genuine, but investors need to keep in mind that economic freedom in real estate will come with some time. Real estate requires some time to appreciate. It takes time and lots of patience before you can earn from your investment.
- If you have little capital in hand, real estate investment might be an issue for you. For example, real estate projects such as commercial properties and apartments need a good amount of money. Without enough capital, one cannot invest in real estate.
- Property management is a serious and complicated task for real estate investors. Unlike forex trading, people need proper management and maintenance for their real estate property in Pakistan.
So, these are some things you need to know before investing in real estate and forex trading. We hope this blog gives you a fair idea about both investment opportunities in Pakistan. Go through the list and secure your money by keeping in view these pointers.
If you have any additional questions or suggestions, leave a comment in the comments section below, and we will get back to you as soon as possible.