KARACHI:

It has been less than six weeks since the KSE-100 index touched its peak levels of 170,000, and it has only fallen by about 6-8% since then. Yet investors have already started jittering, panicking, and losing hope.

People conveniently forget that the market is up nearly 60% in the last five months and more than 100% in the past 12 months before finding a new level that reflects its long-term "valuation" range of around 8x price-to-earnings (P/E). A company earning Rs1 a year is trading at a value of Rs8.

Very good companies with strong outlooks are trading 20-25% below their recent peaks, thereby creating nervousness among new or weak investors with short-term horizons. But don't forget that over the long term, Pakistan's market has delivered average annual returns of 15-20%, i

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