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Top 10 Investment Plans To Invest In Dubai – Aeon & Trisl

Whether you are a local or a foreigner, the best way to be financially independent is to first learn how to invest money in the UAE.

Without conducting thorough research, finalizing the best investment strategy can be difficult, especially in Dubai.

For people searching for ways to invest in Dubai, this article will help provide a comprehensive guide to setting up your wealth-building know-how.

In particular, this blog will give you in-depth knowledge of the 10 most recommended investment options in Dubai.

Let’s begin.

1. Real estate

Dubai is the epitome of a prolific lifestyle and offers the best residential properties to invest in, hotels, offices, and a lot more. With the new law passed by the UAE Government, this Emirate has now become a heaven for real estate investments. According to the new rule, people from all over the world can now own property in Dubai. This has provided a golden opportunity to many ex-pats willing to invest in the most rewarding, trusted, safest, and promising real estate in the world.

However, foreigners can get full ownership of properties only in the freehold areas of Dubai. While in the leasehold areas, temporary ownership can be availed for up to 99 years. This allows foreign investors to generate benefits legally from someone’s else property for a limited period.

An investment in Dubai Real Estate can indeed prove to be one of your best passive income investments. The Emirate’s property portfolio features several different types of properties including Studios, apartments, penthouses, townhouses, villas, shops, off-plan properties, etc. These properties are available in different sizes, prizes, and at different locations for both rent and sale.

In short, keeping in view the growing population and developments in the city, the real estate sector is potentially the best domain to invest in Dubai.

The pros and cons of this type of investment in Dubai include:

Pros

• Increment in property value over time.
• Steady and reliable income.
• Low investment and high returns.
• One of the safest investments in one of the safest cities in the world.

Cons

• Real estate agent fee.
• Maintenance cost.

2. Stocks

Stocks are another good option for investment in Dubai. By investing in stocks, individuals trade in equity of various companies which allows them to own a portion of the company’s capital.

For investors with a solid understanding of companies’ performance, the stock market is a potential investment choice. A calculated risk appetite, a dedicated mindset, and thorough research can earn you big Dirhams while investing in stocks. However, a lack of knowledge and research on market trends can cause you big losses. So, before jumping into stocks, just familiarize yourself with the volatile equity market and the goals of the companies you are looking to invest in.

At present, Dubai has got two stock exchanges namely; Dubai Financial Market and NASDAQ Dubai. Contact an expert to know more about these exchanges.

Pros of investing in Dubai stocks

• Easy to purchase and sell.
• Rapid growth with the economy.
• Investment can be done with very limited funds.
• Quick access to your funds.
• Keeps you ahead of inflation.

Cons of investing in Dubai stocks

• High brokerage rates.
• Risk of losing all the investment.
• Volatile market.
• No guaranteed returns.

3. National bonds

National bonds offer a Sharia Compliant scheme for investing money, intending to provide low-risk savings to people in the UAE. Considering the safety, liquidity, and better interest rates than banks, this type of investment option are regarded as one of the safest investments in Dubai.

Pros

• Less volatile.
• The minimum investment required for bonds is AED 100.
• Fixed returns of investment.
• Easy to choose as per ratings.
• Safe investment tool.

Cons

• With a rise in interest rates, the prices fall.
• Low liquidity.

4. Mutual funds

For individuals with a lack of skills and time limitations, an investment in mutual funds can be your go-to option.

In mutual funds, individuals pool money to invest in either bonds, stocks, and other fixed-income securities under the direct supervision of an expert fund manager.

The two main types of mutual funds based on trade include Open and closed-ended funds. In open-ended funds, an investor can purchase and sell funds throughout the year while in close-ended funds, the purchased funds can only be sold after their maturity date.

Pros

• Convenient investment.
• Less time-requiring.
• Expert management.
• Investment can be done with limited funds.

Cons

• Acquires management cost.
• Longer lock-in periods.
• Risk of poor trade execution.

5. Gold

Because of the resale value, gold is regarded as the most profitable investment after real estate in Dubai.

The market of gold keeps fluctuating, so before you put your money into it analyze the market properly.

Pros of investing in gold in Dubai

• Can be sold anytime to reap profit.
• In Dubai, it is sold at gold price plus a making charge.
• Hold a long-term value.
• Demanded universally.
• Easy to liquefy.

Cons of investing in Gold in Dubai

• Physical storage is required.
• Includes premiums and taxes.
• Lower return value compared to other investment tools.

6. Cryptocurrency

The rise in the bitcoin, Ethereum, and cryptocurrency industry, in general, is probably the most discussed topic among your family, friends, and colleagues these days. This type of investment is nothing, but an exchange medium built digitally on binary data.

Many multinationals have accepted bitcoin as their medium of payment, while many countries including the UAE are allowing the regulated use of cryptocurrency.  This has added a great option to the list of investment options in Dubai.

Despite all the conveniences and advantages, people still need to consider the risks associated with this investment. Read below to know about the advantages and risks that come with investment in cryptocurrency in Dubai.

Pros

• Self-governed and decentralized.
• Highly secure and private.
• Anonymity and transparency.
• Protection from inflation.

Cons

• Highly volatile.
• Vulnerable to digital scams.
• No cancellation of placed orders.
• Risk of losing data.

7. Forex

Forex trading has gained popularity in recent years in Dubai. In this type of investment, investors purchase and sell international currencies in a bid to earn capital gains. In simpler terms, you purchase one currency in exchange for other in forex trade.

Furthermore, UAE doesn’t charge tax in online forex trading. Hence many investors have taken advantage of this option in Dubai. All you have to do is to buy a certain currency at its buying rate from the broker and sell another currency at its selling rate.

Pros

• High chances of getting quick returns.
• Flexibility
• High liquidity.

Cons

• No dedicated exchange in Dubai and UAE.
• Volatile.
• Operational risk.
• No strong regulatory body.

8. REITs

To gain profit from Dubai real estate without purchasing properties, try investing your money in REITs (real estate investment trusts).

These are the stocks of organizations that buy Dubai properties or provide mortgage facilities to real estate investors. By investing in REITs, you get to hold the shares of companies that are investing in the real estate sector.

Consult an agent to know more about this type of investment.

9. Shares

Investors can have shares of any company’s capital until he/she decides to sell them. There are two ways to make a profit from shares, which are appreciation and dividends. Dividends are paid out every three months in most cases while appreciation is more suitable for long-term investments.

When investing in shares it should be kept in mind that the value of shares not only rises but sometimes falls too, resulting in substantial losses.

Note: You need to open a trading account with a broker to invest in the UAE share market.

10. ETFs

For passive investors, this type of investment can be an ideal option as it allows them to hold different types of securities as part of a given investment option. Investment can be done in equity funds in two ways: on your own with financial advisers or with brokers. In the first case, a financial adviser will help you in building a portfolio of ETFs and will revalue them over time while in the second one, you will be needing to open an account with a brokerage firm that must be listed on the relevant stock exchange.

For more diversification, you can also combine different ETFs. For example, an investor can purchase ETFs of US stocks, ETFs of the international market, and ETFs of global REITs. This will reduce any possible risks and will increase investor returns.

That concludes our guide for the top 10 investment options in Dubai. We hope that it will help you in making your final decision regarding investments in Dubai.