Different Investment Options for Expats

By Sakshi Srivastava - 29 Dec 2021 Last Updated: 20 May 2022
Different Investment Options for Expats

Earning money and paying bills isn't the best approach to have a stress-free financial life. Many people, in fact, are guilty of doing so. Why do you think that is? It could be because we all take solace in the fact that we don't make enough money to put aside for our future.

Our never-ending expenses, rather than saving for the future, are on auto-pilot mode. It is, however, not difficult to develop a saving habit and improve our financial situation. UAE provides a variety of investment choices for potential investors to help you with this. But the fundamental worry is whether foreigners in the UAE have the same investment options as Emiratis.

Yes, indeed! Expats can take advantage of a variety of solid investment opportunities in the country, which can help them make a good return on their money.

What exactly do you need to know about investing in the UAE?

Here are five UAE investment options that all savvy investors should be aware of.

Put six months' worth of living costs aside in a savings account, money market account, or money market mutual fund.

The ease of access (liquidity) rather than the profitability of emergency reserves is the most important element. Put your emergency money in a safe place where you can get to them only if (and only if) an emergency arises.

UAE Investment Opportunities: 5 Ways to Invest in the United Arab Emirates

Here are five UAE investment options that all savvy investors should be aware of.

Stocks

Individual and institutional investors can own stocks, which are a share of a company's capital.

When you buy stock in a corporation, you are buying a piece of the company. Stock ownership can be used to produce money in two ways:

  • Dividends: The majority of corporations choose to distribute a portion of their net income to shareholders as dividends. A dividend is the term for this portion. The corporation will give you a dividend based on how many shares you own. Dividends are usually paid every three months by most firms.
  • Stock price appreciation: The appeal of stocks for our purposes (long-term investing) is the rise in their worth (as measured by the stock price) over a lengthy period of time. You have gained AED90 if you purchased a company's stock for AED60 in 2010 and it is now worth AED150.

Bonds

A bond is a debt instrument that governments and corporate companies use to raise money. For our purpose, there are three types of bonds: 

  • Corporate bonds: Company issuances
  • Treasury (national) bonds: Federal government issuances
  • Municipal bonds: Local government, state, city, and local community issuances

Bonds can be used to produce money in two ways:

  • Interest payments are made twice a year to bondholders by bond issuers. Bonds, unlike stocks, have a set interest rate.
  • Bond value appreciation: When the value of a bond rises, you can profit. Your bond's value (which was issued at a higher interest rate) grows as the interest rate falls and new bonds are issued at lower interest rates. When the stock market falls, many individuals switch to bonds, which causes bond prices to rise.

Bonds are often issued for a long time period.

Mutual Funds

Stocks and bonds can also be purchased through mutual funds for individuals who don't have the time or ability to examine the stock market (which is most of us).

Under the supervision of a fund manager, a mutual fund combines money from numerous individual participants and invests it in stocks, bonds, and other fixed-income assets.

Mutual funds provide diversification by combining a significant sum of money from many different investors. This allows them to invest in a wider range of companies.

Mutual funds create money in a variety of ways.

  • Dividends/interest: When mutual funds purchase stocks or bonds that pay dividends or interest, the dividends or interest are distributed to the mutual funds' shareowners based on the number of shares held.
  • Appreciation in the value of the mutual fund: A mutual fund's price rises in tandem with the value of the equities and bonds it owns. In addition, when demand for a mutual fund grows, so does its price.

The value of a mutual fund's share price increases as the fund grows.

ETFs

For today's passive investors, ETFs are the go-to funds.

ETFs have been one of the most popular financial vehicles for diversification during the last decade. Simply put, an investor who owns a share of an ETF gains the ability to purchase many stocks or bonds inside that basket.

RIETs

You can invest in REITs if you want to get some of the benefits of the UAE real estate market without the risks of buying homes (real estate investment trusts).

REITs are equities of firms that buy real estate properties (Equity REITs) or lend money to real estate investors (Mortgage REITs) (Mortgage REITs).

REITs can be bought and sold just like any other stock. Rather than purchasing and managing properties, investors hold the stock of corporations that invest in the market (including mortgage lenders).

Dividends and appreciation in the REIT's price are how REITs make money. They frequently provide regular dividends (indeed, REITs pay out the majority of their profits as dividends), providing investors with a steady stream of income.

Conclusion

The best time to begin your investment journey is now, due to compounding's rapid effects. Dhanguard can assist you in constructing an investment portfolio that is tailored to your personal profile and investment objectives.

Dhanguard is able to offer low costs and an excellent track record of maximizing returns because to modern financial technologies and our concentration on the passive approach to investing in UAE.

Investments is made simple and hassle-free with Dhanguard in Dubai, UAE. We provide you various investment options like Index Fund, Gold, Mutual Fund, Stocks, SIPs, Bonds, Fixed Deposite, Sukuks with the minimum possible trouble including paperwork & payments.

By Sakshi Srivastava

29-Dec, 2021

Investments Related FAQ

Frequently Asked Questions

  • Why should one Invest?

    Earning money now is insufficient, since it may not be enough to meet life's financial objectives. As a result, it is critical to spend money. Saving money in the bank is the same as giving up an opportunity to make money. It is crucial to invest carefully in the different plans available on the market, choosing the one that is ideally tailored to your objectives.

  • What is the eligibility to buy Investment Plans?

    With new technologies and goods, the investment market is rising by the day. The conditions for investing in different forms of investment instruments differ depending on the providers in the UAE.

  • What are the best Investment for Expats in UAE?

    Expats can invest in stocks, bonds, real estate, cash, UAE mutual funds, or other forms of funds in the UAE.

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