One of the top financial benefits for foreign residents of the UAE is the ability to make money by taking advantage of the many great investment options that exist for expats without paying capital gains tax.
However, as an expat who may leave the country anytime in the future, there are certain approaches you must take when building your investment portfolio.
In this article, we will consider 6 tips that will help you invest seamlessly in the UAE.
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1. Choose liquid investments
If you plan to leave the UAE one day, it makes sense for you to prioritize liquid assets that you can easily sell off.
Though the UAE is well known for its high-yield real estate market, it might take time for you to sell off your properties when it is time to leave. A quick sale might require selling at a discount, which means leaving money on the table.
Consequently, you might be better off with a more liquid alternative like real estate investment trusts (REITs). These are stocks of real estate companies that you can easily buy and sell like other stocks.
2. Invest beyond the UAE
Though you can buy some quality stocks and bonds in the UAE, you should not limit your exposure to the country.
Some of the most successful and innovative companies in the world are outside of the UAE (in the US, mostly). Why miss out on the investment potential of such companies?
Consider investing in developed markets (like the US) for stability and low risk, and emerging markets (like Brazil) for their high growth potential.
3. Diversify your portfolio by asset class
While a traditional stock-bond portfolio may serve you well, you can further increase your returns and reduce your risk by considering other alternative assets.
For risk reduction, consider investing in commodities like gold, silver, crude oil, and natural gas. These often have low correlation to the stock market, which means they are usually up when equities are down.
For higher returns, consider investing in cryptocurrencies like bitcoin.
By combining all these assets with your stock-bond portfolio, you can increase your risk-adjusted returns and be better prepared to achieve your financial goals.
4. Consider ETFs if you are a beginner
If you don’t have the skills or time to research individual assets, consider investing in a basket of securities through ETFs.
For example, if you don’t know the best dividend stocks in the UAE to invest in, you can just buy an ETF that tracks the performance of all (or a good number of) dividend stocks.
ETFs allow you to diversify your portfolio without breaking the bank. They also enable you to access alternative assets in the most convenient way possible. You can purchase bitcoin, gold, silver, crude oil, and natural gas ETFs on the stock exchange market.
5. Use a trustworthy broker
If you are not yet familiar with the local market, take your time to study the different brokers available before choosing one.
Based on what we have said, you should prioritize one that provides access to the global financial market. Also, the broker should have a rich list of ETFs across asset classes that you can choose from.
Furthermore, the broker of choice should provide you with a secure, intuitive, easy-to-use platform and educational resources that will make you a better investor.
6. Consider using a managed investment platform
If you want a more hands-off approach, consider a managed investment platform. These are platforms with investment experts that will create a personalized portfolio for you based on your investment goals, time horizon, and risk tolerance.
All you need to do is fund your investment account every month and watch your portfolio grow.
Whether you are taking the hands-on or hands-off approach, Sarwa can help you.
You can purchase individual stocks, stock options, stock ETFs, bond ETFs, bitcoin ETFs, gold ETFs, silver ETFs, crude oil ETFs, natural gas ETFs, and REIT ETFs, among other securities, on their trading app.
If you prefer the hands-off approach, they will set up a personalized portfolio for you on their managed investment platform.
Sarwa is committed to helping UAE expats build wealth, irrespective of their preferred investment approach. They provide you with an easy-to-use platform that a beginner can navigate and educational resources that will help you become more knowledgeable about investing.
