x Abu Dhabi, UAESaturday 29 July 2017

The six guiding principles for investors

Consider your overall plans when making any new investment, and more advice from the roundtable experts.

The majority of investors fail to protect their portfolios or overall financial plans, say wealth managers and financial experts. Here, they share some crucial tips every investor should consider:

Build a financial foundation

While a rising number of clients are starting to put away money for, say, education savings plans or retirement funds, more still need to track how much they are spending. "You can't create a wealth planning strategy without that as your foundation," says Sarah Lord, of Killik & Co.

See your job as an asset

"Your ability to earn an income stream for the rest of your working years - that's got a net present value," says Vince Truong of Holborn Assets. "If your job is really stable, you're in a position to take more of a risk with your other assets. But if not, then you should dial down the risk regardless of what your natural risk temperament might be."

Consider life insurance

This region is "way, way, way underinsured compared to the developed markets", warns Ms Lord. "People tend to just think, 'it won't happen to me', but of course it does," she adds. It is, therefore, important to have that "what if" conversation in case you or a spouse does die, so that the remaining family members can be provided for. "It's not particularly pleasant, but you have to be quite hard-hitting," says Rupert Connor, of Acuma Wealth Management.

Beware the tax man

"You need to think about investment tax ramifications you hold when you go back to your home country, wherever that may be," says Mr Truong. It is also a good idea to stay on top of changes to your home country's tax code. "I think the home countries will get tighter and tighter, and they're going to be coming after your Dubai [and UAE] assets or income if you spend any time at all in your home country," predicts Gary Dugan of Emirates NBD Private Banking. "In the UK, it's certainly tightened up. The US clearly has laws about global income. It may be that more countries will go towards that kind of model."

Protect your assets

It's crucial for expatriates who still hold assets in other countries to ensure their wills are not only up to date, but also valid in their homelands. "A lot of Americans had wills done by some company here, locally, and that is not going to hold up in the US," warns Mr Truong.