What are some key investment trends to watch out for?

Technology and innovation, real estate and infrastructure, health care and education stocks must be part of a portfolio

Businessman checking stock market data on computer screen and contemplating
Powered by automated translation

As the world navigates rough waters due to the high level of inflation, which has led central banks to sharply hike interest rates, and as uncertainties linked to geopolitical tensions continue to be a concern, investors must be cautious and savvy in setting up their strategy.

But they should be even more active in pursuing investment opportunities that might yield considerable returns within an adequate amount of time.

In doing this, they should follow and take full advantage of the long-term strategy set out by the UAE and GCC leadership, which has pursued a diversification of its economy and investment portfolio, enacting a series of initiatives to support investments in key areas from both national investors and foreign direct investments.

One of the most evident trends is linked to technology and innovation. This is a high-growth economic sector, which has been boosted by the advent of extremely powerful technologies such as generative artificial intelligence.

The rising level, likelihood and impact of cyber risks are also attracting investments to create the tools to adequately manage them.

This particular field is extremely interesting for investors, as the efforts to counter cyber risk and related innovation efforts are continuous by nature and constitute a strong element of stability for the companies that will be successful in this field.

Tech and innovation is also an area in which governments around the world compete to attract the most prominent and sizeable companies, as well as the most innovative ventures.

Tech hubs and strong local education frameworks are being created, along with attracting the best talents, to support these companies and create positive returns for the country’s community as a whole. The UAE is at the forefront of these efforts.

Property and infrastructure is another crucial sector which deserves a space in the trends to look at.

The GCC region, and the UAE in particular, are set to become even more prominent global business and tourism hubs, as well as the most sought-after jurisdictions for expats to fully relocate and set up their professional and personal lives.

If we look at the mid- to long-term trends, the real estate sector has been growing constantly, of course with the short-term volatility linked to economic cycles and external shocks, and has yielded interesting returns for investors.

In order to sustain the growth, investment in infrastructure and constant innovation in the related structures and linked services will be a constant in the years to come.

Linked to the above are investments in health care and education. It is evident how critical these sectors are to creating a favourable environment for constant and sustainable growth of all players in the global arena.

The two sectors have a direct impact in boosting the overall economy, given their high intrinsic value and the impact on the “value” of a jurisdiction when such services are rendered locally at a level of excellence.

Again, linked to infrastructure and real estate development is the sector of tourism and hospitality.

The latest figures about the tourism sector show a booming trend, impacting all economic activities linked to it.

Such skyrocketing growth needs huge investment in infrastructure, to both maintain and upgrade the existing ones and build new ones, after a careful assessment on their impact and sustainability from both a financial and environmental point of view.

Talking about sustainability, another major trend is linked to the increased awareness of the impact of human activities on the environment and the urgent necessity to develop policies aimed at sustainable development and reduction of carbon emission.

Therefore, the renewable energy sector and the (still) niche sectors of companies operating in the field of emission offsetting must definitely be part of an investment portfolio, as their importance is growing, and it is likely to grow exponentially.

The above is just a general review of the major trends in investment for the decades to come.

As hinted at the beginning of this column, diversification is key to investing wisely and control volatility of returns, and as we can all see, we have quite a lot to play with.

Roberto d’Ambrosio is the chief executive of Axiory Global

Updated: August 15, 2023, 4:00 AM