Risk is part of life, but how much is too much?



This week I met an Emirati man who explained to me how to avoid getting snapped by one of the ubiquitous traffic cameras located around Abu Dhabi. He sped all the time, he said, because he memorized where the cameras are. For a newcomer like me, he said, the best bet is to stay below certain speeds depending on the road. On the road between my villa and the office, for instance, he assured me that I could safely drive more than the posted limit of 60 kilometers per hour but I would almost certainly get flagged if I zoomed past a camera at more than 80 kilometers per hour.

The next morning on the drive to work, I dropped this knowledge on my wife. The trick, I told her, is to learn where the cameras are on our commute route so we can slow down just below 80 as we approach. That's nonsense, she said - why not just drive slower than 80 the whole way? To me, the prospect of shaving a few minutes off the drive was worth the chance I would get the occasional speeding ticket. For my wife, the benefits were not worth the gamble (it should be noted that I resisted the urge to bring up the report from the Ministry of the Interior earlier this year that "women driving too slowly" was the cause of many traffic accidents).

In other words, we have different attitudes toward risk. I thought of that conversation this week during our financial round table. One of the persistent themes that our panelists noted was how the financial crisis has forced local investors to re-examine their approach to risk. It's a healthy process. First off, there is no such thing as an investment that delivers high returns and no risk. And if a stockbroker or investment adviser offers you something that does, run the other way. It's most likely a scam.

So we all have a choice: how much risk are we willing to take on in pursuit of better returns? The experts on our panel observed that many of us perceive ourselves differently than we really are when it comes to money. Someone who considers himself a risk-taker because he is a weekend dune basher and X-Games addict may get nauseous at the prospect of losing 30 per cent of his nest egg. Someone else who collects the dirhams from the sofa cushions may be perfectly content to risk a loss if there is a chance that a more aggressive strategy could result in an early retirement, or that vacation home on the Amalfi Coast.

There is no "right" approach. The key is to be honest with yourself about your investment goals and what level of risk you are comfortable with. A good adviser will be able to tailor a portfolio to match. Regardless of the risk profile, virtually all investors need to own a diverse mix of assets - some combination of equities, fixed-income investments like bonds and perhaps a dose of currencies and commodities. It's also wise to be exposed to different regions around the world.

Some of the advisers on our panel who are relatively new to the area talked about how common it was until very recently to counsel clients who did not own any assets outside the Gulf region. By not keeping all of your eggs in one basket, you reduce the risk that they get scrambled in the event market realities clash with your expectations. It also pays to be aware of our tendencies. As a rule, men tend to be more comfortable with risk than women - something to do with all that testosterone rushing through our veins, no doubt. There are also evolutionary psychologists who speculate that prehistoric men who were not willing to be be aggressive found themselves sitting alone around the campfire at night.

We all know now that aggression can be taken too far - see Wall Street, circa 2003-04, as well as an ample body of research showing that men tend to be more active traders because they feel confident in their ability to read the markets. What's surprising is a recent study showing how that overconfidence can backfire. The US mutual fund giant Vanguard looked at the behavior of its 2.7 million customers during the financial crisis of 2008 and 2009 and found that men were much more likely to want to sell their shares at stock market lows. They were convinced the market would continue to plummet.

Women, who were not ashamed to admit that they did not know where the market was headed, were more inclined to stay the course - and subsequently enjoyed the market rally that began in the spring of 2009. One co-author of the study told the New York Times that "there's a lot of academic research suggesting that men think they know what they're doing, even when they don't know what they are doing."

On second thought, perhaps my wife has a point about that whole speeding thing. breagan@thenational.ae

UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions

Company%20Profile
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Tips to avoid getting scammed

1) Beware of cheques presented late on Thursday

2) Visit an RTA centre to change registration only after receiving payment

3) Be aware of people asking to test drive the car alone

4) Try not to close the sale at night

5) Don't be rushed into a sale 

6) Call 901 if you see any suspicious behaviour

The%20specs
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World record transfers

1. Kylian Mbappe - to Real Madrid in 2017/18 - €180 million (Dh770.4m - if a deal goes through)
2. Paul Pogba - to Manchester United in 2016/17 - €105m
3. Gareth Bale - to Real Madrid in 2013/14 - €101m
4. Cristiano Ronaldo - to Real Madrid in 2009/10 - €94m
5. Gonzalo Higuain - to Juventus in 2016/17 - €90m
6. Neymar - to Barcelona in 2013/14 - €88.2m
7. Romelu Lukaku - to Manchester United in 2017/18 - €84.7m
8. Luis Suarez - to Barcelona in 2014/15 - €81.72m
9. Angel di Maria - to Manchester United in 2014/15 - €75m
10. James Rodriguez - to Real Madrid in 2014/15 - €75m

Suggested picnic spots

Abu Dhabi
Umm Al Emarat Park
Yas Gateway Park
Delma Park
Al Bateen beach
Saadiyaat beach
The Corniche
Zayed Sports City
 
Dubai
Kite Beach
Zabeel Park
Al Nahda Pond Park
Mushrif Park
Safa Park
Al Mamzar Beach Park
Al Qudrah Lakes 

Business Insights
  • As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses. 
  • SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income. 
  • Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
Company%20profile
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SPECS

Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now

In numbers: China in Dubai

The number of Chinese people living in Dubai: An estimated 200,000

Number of Chinese people in International City: Almost 50,000

Daily visitors to Dragon Mart in 2018/19: 120,000

Daily visitors to Dragon Mart in 2010: 20,000

Percentage increase in visitors in eight years: 500 per cent

Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
Rating: 2/5
 
COMPANY PROFILE

Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed 

Electoral College Victory

Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate. 

 

Popular Vote Tally

The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.

If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.

When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.

How to get there: Emirates currently flies from Dubai to Orlando five times a week.
Moon Music

Artist: Coldplay

Label: Parlophone/Atlantic

Number of tracks: 10

Rating: 3/5

PROFILE OF INVYGO

Started: 2018

Founders: Eslam Hussein and Pulkit Ganjoo

Based: Dubai

Sector: Transport

Size: 9 employees

Investment: $1,275,000

Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri

Dirham Stretcher tips for having a baby in the UAE

Selma Abdelhamid, the group's moderator, offers her guide to guide the cost of having a young family:

• Buy second hand stuff

 They grow so fast. Don't get a second hand car seat though, unless you 100 per cent know it's not expired and hasn't been in an accident.

• Get a health card and vaccinate your child for free at government health centres

 Ms Ma says she discovered this after spending thousands on vaccinations at private clinics.

• Join mum and baby coffee mornings provided by clinics, babysitting companies or nurseries.

Before joining baby classes ask for a free trial session. This way you will know if it's for you or not. You'll be surprised how great some classes are and how bad others are.

• Once baby is ready for solids, cook at home

Take the food with you in reusable pouches or jars. You'll save a fortune and you'll know exactly what you're feeding your child.

COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Citadel: Honey Bunny first episode

Directors: Raj & DK

Stars: Varun Dhawan, Samantha Ruth Prabhu, Kashvi Majmundar, Kay Kay Menon

Rating: 4/5

Singham Again

Director: Rohit Shetty

Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone

Rating: 3/5

UAE currency: the story behind the money in your pockets
Three trading apps to try

Sharad Nair recommends three investment apps for UAE residents:

  • For beginners or people who want to start investing with limited capital, Mr Nair suggests eToro. “The low fees and low minimum balance requirements make the platform more accessible,” he says. “The user interface is straightforward to understand and operate, while its social element may help ease beginners into the idea of investing money by looking to a virtual community.”
  • If you’re an experienced investor, and have $10,000 or more to invest, consider Saxo Bank. “Saxo Bank offers a more comprehensive trading platform with advanced features and insight for more experienced users. It offers a more personalised approach to opening and operating an account on their platform,” he says.
  • Finally, StashAway could work for those who want a hands-off approach to their investing. “It removes one of the biggest challenges for novice traders: picking the securities in their portfolio,” Mr Nair says. “A goal-based approach or view towards investing can help motivate residents who may usually shy away from investment platforms.”
COMPANY%20PROFILE
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COMPANY%20PROFILE
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From Zero

Artist: Linkin Park

Label: Warner Records

Number of tracks: 11

Rating: 4/5


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