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Should You Invest in Gold or Stock? | For Dubai Locals

Whether you are living in Dubai or any other part of the world, Invest in Gold or Stock to securing you and your family’s future remains your primary concern. And if you are a 9-5 job person, you know you need a side hustle or a small investment that can earn you some profit from time to time.

And when this thought hits your mind, you start considering your options. For the locals of Dubai, stock and gold are the two best options. 

Someone who’s already working 9 hours a day can’t afford to work upon returning home. So they prefer investments that promise higher returns with no such effort.

In this article, I’m going to compare gold with stock. By the end of it, you will have a clear picture of the pros and cons of both. And thus, it will be easier to decide whether you should invest in gold or stock in Dubai.

Gold vs Stock Investment Comparison

Here are some of the aspects worth considering when comparing both:

Gold is Stable, Stock is Uncertain Everywhere

Not just in Dubai, but no stock market in the world has stability. The prices of shares keep fluctuating on a daily basis. And sometimes these fluctuations are so big that you either end up broke or make 200% profit.

On the other hand, gold is quite stable. In fact, the value of gold keeps increasing over time, but at a steady speed. For example, in 2019, the price of 24k gold/10 grams in Dubai was 1,767.50 AED. Today, on 5 August 2021, it’s 2195 AED.

You see, the price of gold gradually goes up. And even if some local and global factors affect, it hardly results in any significant loss to the investors. In the share market, no company share enjoys such stability.

Gold Can Be Sold Anywhere, Stock Share Can’t Be

Let’s say you decide to buy some Dubai gold. You buy it from any of the trading platforms or a physical shop. Now, it’s up to you you can keep it in any form. And if you want to cash it out but you’re outside Dubai, you can still cash it. Gold can be sold anywhere in the world.

However, that’s not true for the shares you buy from Dubai’s stock market. You can only sell them in Dubai and will be paid in the local currency. This might sound obvious but it’s a big deal for some people if you have plans of relocating to another country in the future.

Political Events & Natural Disasters Affect Stop Market

If you have followed the local stock market recently, you can understand this point. Dubai’s local stock market, like all other stock markets in the world, went down during the pandemic. And is still in recovering mode.

Pandemic, natural disasters, elections, and several other things (beyond our control) affect the stock market. And when such events happen, no company’s share remains immune to the effect. Further, the aftermath of such events often results in huge losses for small and middle-level investors.

Gold Price Fluctuations are Small

If gold is up or down by 100 AED per tola, it’s considered a big deal. Because gold is not known for making you rich overnight, nor for burning down your hard-earned investment within a matter of a few days. Because the fluctuations are small, they don’t bother long-term investors.

And even if gold seems to be constantly going down, investors can pull out their investment at any time. This is why you will rarely come across gold investment failure stories.

But that’s not the case with stock. To make some money out of your stock investment, you are supposed to buy shares in bulk. And buying in bulk means losing 1000 AED if you are selling 1000 shares with a loss of 1 AED on each.

Gold is Like a Passive Income Source

Investing in gold doesn’t require any such effort. All you have to do is buy physical gold from a reliable source or invest in digital gold via any trading platform in Dubai. Then, you wait for the right time to cash it. 

But that’s not how you work in stock trading. It requires regular attention and timely trading because of the uncertainty. Stock traders have to regularly check online charts or they physically visit the exchange to buy or sell shares.

Stock trading also requires some paperwork and you also have to pay commission to the brokers who assist you in trading.

Stock Trading Requires Strategy

Stock trading anywhere in the world requires significant knowledge and wisdom. You are less likely to be successful in your initial years. It takes time and patience to develop a thorough understanding of the local market. But often, when you have acquired these, you have already gone through multiple losses.

Though you know nothing about what’s happening behind doors, you still have to follow the news about the company whose shares you have purchased, the trends of the local market, historical lows and highs of a certain share, etc.

Takeaway

People have different opinions when it comes to stock vs gold. But it all comes down to the level of risk you can afford, investment in hand, and your objective. If someone wants to play it safe with gradual profit, gold is undoubtedly one’s best choice!

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