In an economic environment where inflation and risk-free rates, such as T-bills and bank savings accounts, hover around **10.5%**, many investors struggle to generate real wealth growth. My **80:20 investment strategy** is designed to **outperform inflation** and secure superior returns while maintaining a balanced risk profile. By following this structured approach for a minimum of **three years**, investors can achieve consistent growth and financial security. Breakdown of the 80:20 Investment Strategy -80% Allocation: Invested in Cash Funds and Income Funds, targeting an annual return of 10.5%. -20% Allocation: Invested in Stock Funds, aiming for a minimum annual return of 20%. This combination allows investors to benefit from steady fixed-income growth while leveraging the stock market’s potential for higher returns. Investment Growth Projection (Annual Compounding) Let’s assume an investor starts with Rs. 100 under this strategy: 80% Allocation – Cash & Income Funds Inve...
Investing in mutual funds has been gaining traction in Pakistan, driven by a combination of improved financial literacy and the attractive tax benefits that these funds offer. For investors looking to maximize their returns while minimizing their tax liabilities, mutual funds present a compelling alternative to traditional bank saving accounts and term deposits. In this blog, we will explore the significant tax advantages that make mutual funds a smart investment choice in Pakistan. Lower Capital Gains Tax One of the most prominent tax benefits of investing in mutual funds is the lower capital gains tax rate. In Pakistan, capital gains from mutual fund investments are taxed at 10%, which is notably lower than the 15% withholding tax imposed on profits earned from bank savings accounts and term deposits. This 5% differential can make a substantial impact on the overall returns from your investment, especially over the long term. Here’s a simple comparison: Mutual...