For many residents, the UAE feels like an ideal place for investment. With no income tax and a recent rise in property prices, opportunities for growth are everywhere.
However, financial experts say one of the biggest threats to long-term wealth lies in poor planning, hidden compounding costs and putting too much money into a single investment – particularly property.
Many residents unknowingly lose thousands of dirhams to transaction costs, service charges, currency conversion and expensive investment products that quietly diminish returns over time. Others invest too heavily into one city, market or property, leaving them exposed when circumstances change.
This week, we look at the financial habits helping - and hurting - investors in the UAE, as well as whether or not now is the right time to invest in a property in Dubai and if political violence insurance is worth looking into.
How are you investing your money? Let us know at pf@thenationalnews.com.
The hidden costs that UAE investors miss when building their portfolios
The most pervasive issue identified by experts is a portfolio construction failure. UAE investors, across income levels, tend to over-allocate to a single asset class – typically property, and often to a single property at that.
"Herd behaviour is common, with individuals allocating a large share of their net worth to a single property, often off‑plan, creating significant concentration and liquidity risk,” says Dr Praveen Gupta, professor and chairman of Manipal Business School at MAHE Dubai and a global investment banker.
In case you missed it …
- UAE Property: Should I invest in Dubai now or wait?
- What is political violence insurance and do you need it in the UAE?
- Can my restaurant manager cut my salary due to a slowdown in business?
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