The performance of the UAE stock markets is broadly in line with the rise in global stock markets. Both the Dubai Financial Market and Abu Dhabi Securities Market are trading at a nearly four-year-high, reflecting a return of investor confidence.
This is also in line with the economic growth of the country.
This indicates that investors are returning to the markets that they abandoned following the financial crisis of 2008-09 when globally, bourses begin to see money flying out, perhaps because it was needed to fix problems elsewhere.
Although the current growth signs are encouraging, investors need to guard against day traders and speculators who try to boost the market by injecting liquidity only to pull the rug from under the investors’ feet — taking their money.
A cautionary approach could help retail investors, many of whom lost money during the downturn. However, those who have been holding on to the shares could heave a sigh of relief.
Stock markets are for long-term investment. Investors should take a long-term approach while entering the market. They should be in the market during both ups and downs. One should not enter the market to make a quick buck as this affects good investors.
Investors in the UAE also need to learn about market rules, stock prices, fundamentals and what causes fluctuation in share prices — in order to benefit from the market and their investment.