Local stock markets could provide a bountiful return in three to five years, according to Peter Cooper, Editor & Publisher of ArabianMoney, the only independent investment newsletter published in the region.
“UAE stock markets look ripe for an excellent recovery in the medium term. However to reap the benefit investors must be prepared to play the market long and resist frequent trading,” said Cooper in October’s subscription newsletter.
“This is the opposite approach to most local investors who fancy themselves as nimble day traders,” he said warning that many have suffered by frequent trading.
“Many individual day traders have fallen on hard times these past few years, yet they return for more of the same.
“It’s time to stop day trading and look to the inevitable longer term rise of the local bourses. Frequent trading will not make you rich, rather it keeps brokerage fees fluid.”
Cooper said that a strategic approach to investment in UAE stocks is the best way to make money over time.
“Oil gives the UAE the advantage of a rapid recovery profile. It also means that the value of local businesses will rise faster than in many other countries.
“The time to buy shares is when they are cheap and relatively quite and not to wait until there is (upward) movement,” warned Cooper.
He noted that long-term investment view is nothing new citing the success of high-profile traders, such as Warren Buffet.
“Many investors have made their fortunes by taking a longer term play. Warren Buffett, for example, owes his $45 billion fortune to the power of compounding high-growth shares over many years and ‘buying when others are fearful’.”
In the October issue of ArabianMoney , Cooper offers advice on how to assemble and manage a strategic investment portfolio in local equities.
“Right now, fears remain about the unknown liabilities of local banks and many are still nervous about the stability of the global economy. Thus, under pinned by the real estate crash UAE equities are presently trading at low values.
He noted that the upside for the UAE is that it is a high-growth oil economy and the approach of Peak Oil means that oil prices are going to go higher, and stay high.
“To participate in the recovery of the next few years, the best time to buy UAE equities will likely follow the imminent and long overdue correction in global financial markets, he concluded.
