The US may be in a bull market driven by the artificial intelligence revolution, but the first half of 2023 has been hard going as inflation, war and recession sink investor sentiment.
Now even the US tech resurgence looks fragile, as it has been built on just seven stocks – Apple, Microsoft, Amazon, Google, Nvidia, Meta and Tesla – while the rest of the S&P500 flounders.
If you are looking to invest $10,000 (Dh36,725) over the next quarter, it might be wiser to look elsewhere, so here are three rival trends to consider right now.
The first is controversial and volatile, but could still prove profitable for those happy to take the risk. The second is a more defensive option that could help investors take advantage of the forthcoming US Federal Reserve “pivot” when it finally stops increasing rates and starts cutting them instead.
The final option is to invest in the only other major stock market to match the US for gains this year, as it could have further to go.
As with any investment, you must consider both the risks and rewards and should aim to hold for a period of years, not just three months. These three opportunities may all pay off, but only if you give them time.
Bitcoin
Bitcoin divides investors like nothing else but few will deny that it has staying power.
After losing three quarters of its value when crashing to $16,606 in January from $67,000 in October 2021, it’s showing signs of life again.
Even a sceptic like Nobel-prize winning economist Paul Krugman has given up predicting its imminent demise, recently confessing: “There always seems to be a new crop of believers. Maybe just think of it as a cult that can survive indefinitely.”
The price is up 85 per cent year to date to $30,288 at the time of writing, triggering the usual outlandish claims that it’s on course to hit $500,000 or some other fanciful figure.
Bitcoin isn’t digital gold, as some claim. It’s too volatile for that. It’s perhaps best seen as a play on investor sentiment and the price has picked up as tech stocks surge and investors position themselves for the Fed pivot.
On those terms, should you invest in it?
Crypto investors have shrugged off the latest challenge from the US Securities and Exchange Commission, which is charging the two biggest crypto platforms Coinbase and Binance for various trading, oversight and registration offences, says Katharine Wooller, business unit director at Coincover.
“Bad news from a regulator is far from unusual and the US is only a small market for a truly global asset. With proper protection for digital assets and regulatory frameworks being established in a number of jurisdictions, reputable crypto is firmly in business-as-usual territory,” she adds.
Naturally, business as usual for Bitcoin will no doubt include its fair share of scams, platform collapses and intense volatility, but investors who can stomach all of that may find today’s entry price tempting. Just remember, you could lose all your money with no redress.
Bonds
Government and corporate bonds lie at the other end of the risk spectrum, and they’re having a moment too, says Tom Stevenson, investment director at Fidelity International.
“For the first time in years, investors are focused not on shares but fixed-income investments, including bonds,” he adds.
Bonds are issued by governments and companies (they’re known as corporate bonds) to raise money to cover their spending.
They pay a fixed rate of interest with the promise to return your capital at the end of the term, but prices crashed last year as interest rates soared and buyers demanded big discounts to buy older bonds paying next to nothing.
“That’s bad if you own the bond, but it can provide an opportunity for new investors to buy an investment with negligible risk at an attractive price,” Mr Stevenson says.
Investors could lock into today’s higher yields, on the assumption that rates will fall when the Fed pivots. That will drive up the price of existing bonds, reversing last year’s meltdown.
The stock market ruled for a decade but now bonds look enticing again, says Damian Hitchen, chief executive at Saxo Bank Middle East.
“Both US and UK government bonds currently yield between 5.50 per cent and 6 per cent a year, the highest since 2003,” he says.
He adds that investors often believe they need large sums to invest in bonds, but they can invest in a bond fund for as little as $1,000 on a trading platform.
“As investors seek to diversify and balance their portfolios, bonds once again are proving to be a valuable asset,” Mr Hitchen says.
There are scores of government and corporate bond exchange-traded funds (ETFs) to choose from, covering the US, Europe and emerging markets, with some offering inflation protection, too.
Popular names include the Vanguard Short-Term Inflation-Protected Securities ETF, JPMorgan International Bond Opportunities ETF, the Fidelity Total Bond ETF and the iShares TIPS Bond ETF, which offer broad exposure to inflation-protected US Treasury bonds.
This doesn’t mean investors should dump stocks and pile into bonds, but they may want to adjust their exposure.
Japanese equities
In January, we called Japan a “contrarian call” as the country’s stock market seemed poised to recover after decades in the doldrums, and that’s exactly what it’s done.
While central bankers in the US and Europe were tightening monetary policy, the Japanese authorities were doing the reverse, unleashing a market-friendly blend of fiscal expansion, monetary easing and corporate governance reforms.
As investors seek to diversify and balance their portfolios, bonds once again are proving to be a valuable asset
Damian Hitchen,
chief executive at Saxo Bank Middle East
It seems to be paying off, with the Nikkei 225 Index up 26.53 per cent so far this year to more than 33,000, lifting it to levels not seen since 1990.
“Along with the US, it’s this year’s stellar outperformer and the growth is coming from a much wider base,” says Vijay Valecha, chief investment officer at Century Financial.
The nation’s shares were given another lift by Warren Buffett, the world’s most famous investor, whose trip to Tokyo in April and enthusiasm for top Japanese companies like Itochu, Marubeni, Mitsubishi and Sumito have inspired fund managers to up their exposure, too.
“Mr Buffett has been tempted by historically low valuations compared to developed market counterparts, sizeable cash flow generation despite higher debt levels, and Japanese yen depreciation, which has boosted exports,” Mr Valecha says.
Hal Cook, senior investment analyst at Hargreaves Lansdown, says the Japanese stock market has suffered many false dawns and could face a short-term correction after strong recent gains, but the long-term looks promising.
“Unlike other developed markets, Japan has not been raising interest rates, so cash offers savers little protection against inflation. There is $7 trillion sitting in cash in Japan – if that flows towards the stock market, it will be a welcome accelerant,” Mr Cook adds.
Many investors have little exposure to this forgotten corner and may want to look for an entry point over the next two or three months.
Popular ETFs include iShares MSCI Japan, JP Morgan BetaBuilders Japan ETF and WisdomTree Japan Hedged Equity.
The Melbourne Mercer Global Pension Index
The Melbourne Mercer Global Pension Index
Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.
The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.
“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.
“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”
Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.
Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.
“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.
What can you do?
Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
You can report an incident to HR or an immediate supervisor
You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline
In criminal cases, you can contact the police for additional support
UAE currency: the story behind the money in your pockets
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
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Tips to stay safe during hot weather
- Stay hydrated: Drink plenty of fluids, especially water. Avoid alcohol and caffeine, which can increase dehydration.
- Seek cool environments: Use air conditioning, fans, or visit community spaces with climate control.
- Limit outdoor activities: Avoid strenuous activity during peak heat. If outside, seek shade and wear a wide-brimmed hat.
- Dress appropriately: Wear lightweight, loose and light-coloured clothing to facilitate heat loss.
- Check on vulnerable people: Regularly check in on elderly neighbours, young children and those with health conditions.
- Home adaptations: Use blinds or curtains to block sunlight, avoid using ovens or stoves, and ventilate living spaces during cooler hours.
- Recognise heat illness: Learn the signs of heat exhaustion and heat stroke (dizziness, confusion, rapid pulse, nausea), and seek medical attention if symptoms occur.
MATCH INFO
World Cup qualifier
Thailand 2 (Dangda 26', Panya 51')
UAE 1 (Mabkhout 45 2')
Specs
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The specs
Engine: Four electric motors, one at each wheel
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Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
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Ain Dubai in numbers
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
Scoreline
Arsenal 0 Manchester City 3
- Agüero 18'
- Kompany 58'
- Silva 65'
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Race 3
Produced: Salman Khan Films and Tips Films
Director: Remo D’Souza
Cast: Salman Khan, Anil Kapoor, Jacqueline Fernandez, Bobby Deol, Daisy Shah, Saqib Salem
Rating: 2.5 stars
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
UAE currency: the story behind the money in your pockets
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Engine: 80 kWh four-wheel-drive
Transmission: eight-speed automatic
Power: 402bhp
Torque: 760Nm
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Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
UAE currency: the story behind the money in your pockets
Company Fact Box
Company name/date started: Abwaab Technologies / September 2019
Founders: Hamdi Tabbaa, co-founder and CEO. Hussein Alsarabi, co-founder and CTO
Based: Amman, Jordan
Sector: Education Technology
Size (employees/revenue): Total team size: 65. Full-time employees: 25. Revenue undisclosed
Stage: early-stage startup
Investors: Adam Tech Ventures, Endure Capital, Equitrust, the World Bank-backed Innovative Startups SMEs Fund, a London investment fund, a number of former and current executives from Uber and Netflix, among others.
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