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Getting your finances in order is always a priority for most. A lot of people turn to invest excess money as a way to grow their wealth as it is all about applying certain strategies to ensure that you get maximum returns. When you invest, you can utilize a part of your assets while they make more assets. You can choose from a multitude of investment options like real estate, stocks, and bonds, or even seek out cryptocurrency opportunities. You can choose between short-term or long-term options or diversify your portfolio with a combination of the two. Being one of the most affluent countries in the world today, people are looking for the best investment in UAE.
While there are a lot of different investment options available, not all of them are the best for you. That is why we have created this guide to the best investment options available in the United Arab Emirates.
Investments in Dubai
Investing in Dubai is a cut above the rest – and it’s not just ex-pats that the UAE economy is promising for. It is an exemplary example of progress and sustainable development; it has become an investment hub of choice for countless international investors from all over the world. There are many options to choose from; stock exchange trading, real estate purchasing and other kinds of asset purchases, private pension plans, funds, and deposits. However, you should not let Dubai be your only focus; other dynamic towns like Abu Dhabi, Ras Al Khaimah, and Sharjah are also worth a watch as opportunities come up in this true melting pot!
Traditional industries such as oil and gas have garnered high interest from investors that have streamlined the services offered beyond what locals may expect. Fast forward to 2019, the International Monetary Fund (IMF) saw a great deal of growth in the local economy with a GDP of 3.7% compared to under 3% in 2018.
Best Short Term Investments In UAE
Short-term investment plans offer a great way to meet your short-term financial goals. They’re focused on providing substantial returns while giving you the ability to remain relatively risk-free if needed. The fact that they include maturity periods of less than five years means you’ll be able to keep up with your plans without feeling weighed down by long-time commitments. Since such investments don’t normally have any complicated processes associated with them, it is a good place to start for new investors.
Saving bank accounts are a top choice for many people that are looking to keep their hard-earned money safe. With such a large number of banks available online and off, they’re also one of the easiest ways to go about storing your money in a risk-free manner. Banks make it quick and easy to deposit money as well as withdraw it if you need cash fast. There are no fines or fees associated with moving your own money back out of the bank. Most banks are offering a pretty low return on interest nowadays which means you usually lose out on a percentage of your profits in order to gain the convenience factor.
The UAE is a great place to be, allowing one to invest in a diverse array of financial products. FD’s offer a lot and can really benefit an investor who is looking to safeguard their money and minimize risk while also limiting volatility. If you’re looking for such an investment opportunity with low risk then you should opt for fixed deposits. Here, you can invest your money for up to 10 years. Of course, it’s always possible to withdraw early, but some fees will be deducted from your initial deposit if you do so; therefore we would suggest investing a manageable amount for a shorter term is a better choice than investing a large sum that you may need before maturity as you could lose out on a decent sum of interest.
There’s some really great news for those who haven’t saved enough for retirement yet, or are simply unsure of how to get started. Some banks have monthly dividends that allow you to put as much money aside as you like, without having to save a fortune at just once! So if you need more time to build your bankroll, consider recurring deposits. The idea behind this is to provide people with the ability to make small but consistent investments over time. It is important to note that the rate of interest you earn on this type of investment is taxable.
As far as a low-risk way to diversify your portfolio goes, precious metals can be great options to consider when it comes down to making wise investment decisions. Gold is known for being especially liquid and one of those safe bets that investors often turn to for short-term needs. When used over the long term, though – their prices tend to skyrocket! This is why many people believe that precious metals make excellent investments when it comes to hedging against inflation.
Fixed Maturity Plans
They are ideally short-term investment options. They come with a fixed tenure and make up a lot of investors’ portfolios if they’re looking for investments that have liquidity and instant liquidity benefits to them. Although returns from FMPs don’t necessarily happen on a regular basis, many people choose this option because they’re looking for a lump-sum solution.
Best Investment In UAE For Expats
UAE is truly a gem for ex-pats looking to invest their money in a way that not only brings them great returns but also allows them to be well taken care of. Not only does the country have flexible taxation laws but the business realm is particularly vibrant— there are multiple types of investments one can make through either doing it directly or going through an investment agency. Any resident or interested ex-pat investor will find that there are plenty of things to delve into when it comes to investing.
People who are interested in getting a real estate investment property in UAE may want to start by researching the current economic growth of the area they are considering. The UAE has increased cash flow, therefore investing in property will be the most lucrative idea for investors.
On top of economic growth, Abu Dhabi and Dubai are two examples of some of the finest sightseeing destinations for tourists from all over Asia and globally, bringing more revenue to both economies as well as properties within these areas! And the best part? Rental gains are soaring in Dubai (roughly 6-10%), meaning you can avail yourself more space in Dubai with AED 1 million than multiple other cosmopolitan cities.
Real estate in Dubai has been booming because of the surge of investors from all over the globe. A perfect blend of historical and modern infrastructure with a rapidly growing economy has earned people’s trust to invest in this beautiful city. Summing up— all the important developments alongside population growth make sure that when you invest in real estate, you will receive excellent returns.
Investing in stocks is an excellent investment for ex-pats living in the UAE. It’s what many people think of beginning with since stock market investments are something most people can get familiarized with right away and there’s no experience needed. While it may be easy to learn, there are some pretty important things that you need to know before even thinking of investing in stocks so that you don’t become part of a very close statistic! For one thing, it’s essential to do your research properly so that you have at least some sort of understanding or knowledge of what the stock market is like and how it works to avoid any kind of risky investment strategy.
Stock market transactions tend to be quite volatile, so they aren’t the finest investment options if you want something safer and less risky. If you’re not sure how trading works right now, talk to a financial advisor.
Mutual funds are quite easy to understand once you break them down. Put simply, they are investments with multiple stocks typically integrated into one account. So, what exactly makes mutual funds so great? There are numerous advantages for investors— some of which include portfolio diversification, economies of scale (EOS), and liquidity— all important things to look at concerning your investment portfolio and its future potential earning power.
Mutual funds are an excellent option for dipping your toes into the stock market without having to make a huge initial investment. They are a great way to get involved gradually and focus on solid companies that have proven themselves over time. By splitting the money of many investors between various companies, mutual funds tend to spread out the risk and help keep their investors’ investments protected.
Small investors can also win big with a small investment in mutual funds. Partnering up with an experienced and proven company helps you keep the cost down and maximize your profits. The best way to build your wealth over time is by planning ahead, diversifying your deal, and letting the professionals do their thing because they have been doing it for years!
Exchange Traded Funds (ETF)
Both experts and amateur investors can find a wonderful way to increase their investment portfolio’s value: exchange-traded funds (ETFs). They currently not only allow traders to enjoy greater gains, but they also allow them to contribute less to their trading efforts because the trading costs are significantly reduced. These can be a real asset to your portfolio if you’re looking for a more cost-effective way of trading- and it may also be the product you need if you’re looking to develop multiple streams of income within your portfolio that has the added advantage of being able to grow organically over time.
There are a number of financial institutions in the UAE that can help you explore potential opportunities for offshore investment advice and planning. Owning a diversified portfolio of assets outside your motherland can help reduce risk which is especially important when taking on investment portfolios in general. These firms provide investors like you with financial planners who will advise you on how to diversify your portfolio in a way that will help meet your specific financial needs.
They can provide with you the potential to increase your investment returns during a short period. They are based on the price of any underlying asset – be it stock, commodity, interest rate, or currency. Their investing value fluctuates according to changes in the market trends and values. Their basic features include comparatively early maturity, regular interest, and principal payments. It’s very important to know that structured notes are high-risk financial instruments. When looking for such financial carriers, choose those who treat you fairly and offer diversification.
As increasingly globalized societies emerge modern-day ex-pats are paying more and more attention to their future financial well-being. Unlike saving money in the bank, some of the above-mentioned investment options will allow ex-pats to invest their hard-earned money in the right place by securing their future financially.
Regardless of what you are looking for, the above investment options will surely accommodate your needs. However, it is still important to do your research and have a game plan in place. For instance, if you have a large sum of cash that you need to invest, then looking for a higher return and taking more risk might be the way to go. Alternatively, if you are just starting out, then you might want to stick with a safer investment option.
If you are planning for the future, it is essential to plan for the kind of future you want. Planning for the future is not just about putting money into your bank account. It is about saving for your retirement, your children’s education, your health, and much more. At Quadra Wealth Management, we can help you with the best investment in UAE to secure your future. We will go through a range of investment options so that we can advise you on the best plan based on your financial goals.
About Khalid Shamim
Khalid Shamim has been in the financial industry since 2004. He believes his previous tenure with ABN AMRO Bank, Dubai and UAM (Universal Asset Management), Geneva were an ideal foundation for his work a wealth manager.
Qualified to CISI (Chartered Institute of Securities & Investments), UK and always ready to help expats align their investments and create wealth through Structured Notes.
Blog published by Khalid Shamim