ISLAMABAD, March 15: The Securities & Exchange Commission of Pakistan (SECP) issued here on Friday the long-awaited “Investor Guide” for helping investors, both present and potential, avoid unnecessary losses and obtain maximum profit on their capital.

The need of such an exercise was felt because of the frequent financial scams in which millions of Pakistanis have lost their investments due to ignorance about the working of financial institutions and unrealistic and windfall rates of profit promised by unscrupulous elements. This state of affairs has seriously affected the confidence of the people even in genuine modes of investment.

The Guide, the SECP spokesman told Dawn, would soon be available at all SECP offices and stock exchanges. Besides, it can be viewed at the SECP website — www.secp.gov.pk.

Coming after years of preparation and in the face of opposition from the vested interest, the Guide spread over two volumes was also aimed at encouraging investment in the stock market, the spokesman stated.

The Guide provides tips for wise investments and some new mechanisms introduced in the stock market. For potential investors, it explains the essentials of investing in the stock market and the various types of investment options available to them, leaving no room for misconceptions.

The investors, it stresses, inter alia, must be prepared “to do plenty of homework prior to investment, determine their tolerance for risk before they invest, think of long-term gains and beware of swindles.”

“Don’t put in your money until you have understood all relevant information regarding the investment and prepare yourself for the rigorous homework of analysing investee company’s annual reports, accounts and other statements while keeping abreast of what’s happening in the industry, country and elsewhere that may affect his/her interest.”

The Guide has cautioned the investors against dealing with the stockbroker, who is not licensed to trade by the SECP and advised to prefer firms with good track record.