LAHORE: "If you see a bandwagon now, it is already too late for most of us to jump on it," smiles a senior citizen who was asked as to where would he like to put his money for safe and reasonable returns - in land and property or in stocks.

"For those who went into land or stocks a couple of years back or so, it was fine. They did make some money. But now I doubt whether people whose net worth (in cash) ranges between Rs500,000 and Rs2 million stand a chance to make any money from stocks or real estate," says a 67-year-old former banker.

A majority of small savers like pensioners, widows and others who wish to invest in stocks or real estate for reasonable and regular returns have already missed the bus if they haven't done so, he says. "With our paltry sums, we cannot purchase land in areas where the price is going up. And investing money in real estate in cheaper areas is as good as putting it away in bank lockers."

With bank interest rates at an all-time low, such savers are actually in a dilemma as to where to look for better returns to beat the rising inflation eroding the real value of their savings.

"Putting your money in banks means that you are prepared to lose it as the average return on bank deposits is not more than one to two per cent and the inflation rate has gone well beyond the government claims of five per cent or so," a senior executive of the Bank of Punjab (BoP), who asked not to be named, says.

So where should small savers go? Business and trade, or real estate or stocks? Economist Shahid Kardar believes that "it is too small a capital for anyone to invest in a business or an enterprise."

What about land and stock market? "Well, yes, there is a chance to make some money in real estate. But only for those who have the expertise and the will to pull out their money as quickly as possible. For those who want to wait for prices to rise further, it may be too risky," says Mr Kardar. The stock market also doesn't offer much for small investors. "You may buy some cheaper shares and wait for dividends. But if you want to make money from trading, it is not possible with this kind of money."

"I don't think small savers and individuals with meagre cash should or can invest their money in stocks or land in view of the speculation and the risk involved," the Bank of Punjab executive said.

"Our real estate sector is fraught with frauds, and is a haven for parking black money. The small investors just don't have the expertise to compete with black money," the banker says. "The current situation (of soaring land prices) is the result of speculation in the market by bigger investors. The bubble has to burst. It's just a matter of time. The same is the case with the stock market, which has no scientific basis. Besides, a majority of people do not have the kind of knowledge or expertise required to make money in stocks."

With bank interest rates at an all-time low and with the prevailing speculative situation both in real estate and stock market being what it is, the banker says, the best, most secure option for savers, especially senior citizens, is to put their money into the National Saving Schemes (NSS) that offer a relatively better return at least for pensioners and widows on a regular basis.

Economist Dr Faisal Bari, who is currently working for the Dr Mahboobul Haq Centre for Human Development, believes that the shortages in the economy continue to create "bubbles for investment" as has been the case in the automobile sector. "It is also one of the relatively safer areas for investment by small savers for quicker and better results. You can make quite a handsome return by selling cars on a premium."

Though it is impossible to assess the exact number of small savers with cash of Rs500,000-2,000,000 in hand in Punjab, economists agree that their percentage couldn't be very large. "With 35-40 per cent population living below the poverty line, the number of people with this kind of liquidity shouldn't be more than five to seven per cent of the total population of the province," says Dr Bari.

"For salaried middle classes, it is not possible to save much. Only professionals like doctors and engineers or those who have inherited assets and property from parents may have this kind of liquidity. Or maybe those who had purchased a plot of land or constructed property in the good times when the rates were still affordable and sold it (recently) at a higher price," says Mr Kardar. Others who are supposed to have cash in hand to this extent include overseas Pakistanis and retired government employees.

Whether real estate and stock market and other "bubbles" in the economy offer much to small savers or not, it is a hard fact that a majority of them are scared of taking any risk with their 'life's savings.'

"The infamous cooperative and Taj Company scams in the beginning of the 1990s and the recent forex companies fraud are enough proof that small savers are not safe anywhere. Pensioners, widows, and other small savers lost billions of rupees in these scams, and have yet not been able to get back their lost deposits. Everyone is after your money because you are the softest target for the swindlers," says the former banker. But a leading economist says: "Greed has a way of coming back. We may be cautious about investing in land or stocks because we do not have the expertise to manage it and have to depend on others. But if someone offers us a hefty return as was done by the cooperatives, we would be ready to put every penny in it without thinking twice."