It is truly a marvel to see how far UAE has come in a span of few decades. From being an impoverished desert region to becoming one of the largest and the most diversified economy in the gulf region, it has truly been a remarkable journey.
According to AT Kearney, a well reputed American consulting firm, UAE is among the top 20 countries with regards to global service business. Furthermore, it is ranked at 31 in the list of countries best for business by Forbes.
While UAE’s economy already enjoys a high per capita income along with a significant annual trade surplus, things are looking even better for 2018. According to IMF, UAE’s economy is expected to further strengthen in 2018.
It can be safely said that the UAE market holds tremendous potential for willing investors. There are a variety of investment opportunities available to gain a high Return on Investment (ROI). However, it can be daunting to pick out feasible investments in the quest of seeking the best investment in UAE.
Furthermore, there is also the unique predicament when you consider the fact that the population of UAE has a majority of expats. At one end of the spectrum, expats who are new to the country simply do not know how to invest in UAE where as on the other end, there are expats ready to make the most of the opportunities provided by the country.
This means that the best investment in UAE for expats may differ from others and hence, the varying requirements of expats must be considered as well in the evaluation of different investment opportunities.
In this regards, this article will try to pick out the the best investments in the UAE for 2018. It should be noted that these investments are not exhaustive in nature and serve as a guide for investors looking to go beyond having their cash parked in a saving account. Furthermore, it is important to keep in mind that all investments carry risk and you should do thorough due diligence from your end and never invest more than what you can afford to lose.
Having said this, let’s look at the 3 best investment opportunities in UAE:
The meteoric growth of UAE makes property easily the hottest sector of the country. It is simply astonishing to see the rate at which buildings are being constructed in the country and the overall boom of the sector.
For example, take the emirate of Ras Al Khaimah (RAK) that is capitalizing on its natural beauty and moving progressively to become a major tourism destination. According to Ras Al Khaimah Tourism Development Authority (RAKTDA), there was a growth on 19 percent during 2017 in the overall number of tourists visiting the emirate.
Furthermore, consider the Dubai Silicon Oasis (DSO) area in Dubai. A few years ago, it was considered to be a place in the middle of the desert (well, people used to say this about UAE!) but now it is a thriving residential and commercial community, thanks to the aggressive expansion of Dubai.
If you consider expats, it is quite prudent to buy their own home if they plan to stay in the country for long. In an ideal scenario, they will be paying roughly around the same amount as monthly installments as their rent but will be building an asset in the process. So, basically, it is like using our rent money to invest. On the other hand, a property can be purchased to rent out to others or to be converted into a commercial property. This will provide a steady source of regular income in the form of rent.
Mutual funds are an excellent option for those looking to invest passively. It is an extremely convenient way to take exposure in the market that offers built-in diversification and stress free mechanism. Basically, you invest in an instrument that is a pool of investment managed by professional fund manager.
There are different mutual fund products to cater to the different need of investors. Once you have invested in a mutual fund, you do not have to worry about the day to day movement of the market. The fund manager of the mutual fund is taking care of that for you.
Exchange traded funds (ETFs) are open-ended investment funds listed on a stock exchange and have become popular because they are low in cost and are easy to trade.
If you don't feel comfortable investing in ETFs yourself, Sarwa is the UAE's first automated investment platform or 'robo-adviser'. You simply fill in your details and complete a risk profile questionnaire, which determines your level of exposure to certain assets. If you're happy with the suggested ETF portfolio then you simply add your funds and watch your money grow. Sounds easy, right? It really is.
Read more: ETFs - easy and cheap investments for expats
I admit that this is the most controversial option in the list and will warn everyone beforehand that investing in cryptocurrences is extermely speculative and currently, this market is largely unregulated. Therefore, anyone considering to invest in cryptocurrencies should be mentally prepared it is possible that they may end up losing all their investment.
Having said this, there is a lot of potential in cryptocurrencies and the underlying technology of blockchain. In its unique way, it kind of resonates the exponential growth of UAE where it has risen above all odds to mark a place of its own in the world.
You may have heard about Bitcoin, the biggest digital currency, which is the cause of much debate nowadays. It is somewhat complicated to buy your own digital coins but residents of UAE will be happy to hear that we have our very own exchange for the Middle East and North Africa: BitOasis.
BitOasis offers the option to trade four of the leading cryptocurrencies: Bitcoin, Ethereum, Ripple, and Litecoin. It is quite convenient to deposit money in your trading account. BitOasis accepts deposits from the leading banks in UAE as well as the option to use your credit card to do the same (for verified accounts only).
Cryptocurrencies holds immense potential and in the words of Peter Thiel, the co-founder of Paypal:
“I do think Bitcoin is the first [encrypted money] that has the potential to change the world.”
Therefore, if you are willing to take risk in hopes of reaping potentially huge rewards, you should allocate a portion (10% max) of your investments in cryptocurrencies
The UAE offers a vast variety of investment opportunities and those looking for a high ROI should definitely consider investing in property, mutual funds, and/or cryptocurrencies.
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