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Stocks are often the best investment option for people in low or high-net-worth segments.
With its profits and market value, Amazon is one of the world’s largest companies.
Amazon’s continued growth makes investing in Amazon stock a great way to diversify your portfolio.
In a survey done by Payfort,
- Only 38% of UAE residents are able to save 10% of their income,
- 23% manage to keep 10% to 25% of their earnings,
- 39% of people do not save anything
No matter how much you save, whether it’s Dh100, Dh250, or Dh1,000, you’ll still increase your savings over time if you invest wisely.
It’s better to invest unutilized income rather than save it in a bank account.
Why Invest in Amazon from the UAE?
Amazon is one of the world’s most valuable and traded stocks. Investing in Amazon’s stock can passively grow one’s income.
- The popularity of online shopping is growing
- Prime usage is on the rise: 200 million members
- AWS dominates the cloud service
- The revenue trends are positive
- Customers of Amazon are loyal
Future Savings:
Amazon can be a good investment for emergency savings, retirement savings, and large purchases.
There’s little else to do other than make an initial deposit and buy the stock. With your phone, you can track the progress of your investment.
Geographical Diversification:
By investing outside of the UAE, you diversify your investment portfolio.
A diversified portfolio reduces risk. Diversifying your investment portfolio into various asset classes and sectors is a good approach.
Returns on Stock:
Assuming you had invested AED 15K in Amazon 10 years ago (Nov 2011: $217 per share approx.), this would give you AED 255,480 (Nov 2021: $3696 per share approx.).
That would be an increase of 1603% in 10 years.
Based on the above growth, Amazon provided around 30% in annual returns. That’s more than twice what the index provides!
Learn how to invest in Amazon stock to increase your income passively. Find out how to get started now.
How to Invest in Amazon in UAE?
Amazon shares can be purchased directly or indirectly.
- By opening an account with a foreign broker, you can purchase shares directly from the company.
- You can indirectly invest by choosing a Mutual Fund or Exchange-Traded Fund that invests in international stocks.
Amazon Investment Plan
Direct Investments
With direct investment, you buy stocks directly at the current price.
Holding the shares for a longer period of time will allow you to either benefit from dividend payments or watch the value of your shares increase.
It is recommended when you buy amazon stock that you buy at least five or six other stocks to have a diversified portfolio.
Mutual Fund
Basically, mutual funds work by collecting money from individuals and investing it in many different kinds of securities.
A mutual fund may be a better investment if you are unable to research the best stocks, ETFs, or other small investment options.
Many UAE funds are allowed to invest on the American Stock Exchange.
Consider investing in a mutual fund that holds Amazon and as well similar stock.
ETF – Exchange Traded Funds
ETFs are funds that brokerage companies or fund managers create to allow you to invest in a wide range of companies with a minimum of effort.
The primary difference between ETFs and stocks is that, although you invest in a group of companies, you don’t hold any stock, you own only a portion of the fund that owns them.
Some UAE funds offer the option of investing directly in US equities.
No matter how big or small your investment fund is, diversification is key to investing, so set aside some of your savings for ETFs.
Consider investing in an ETF fund that holds Amazon and as well similar stock.
Best Books in Stock Investing
How to Buy Amazon Stock in UAE?
If this is your first time buying stock, don’t worry. The following steps will help you get started:
Avoid Forex & Futures
If you have a limited investment amount and are unfamiliar with investing, you should avoid complicated options such as futures and forex.
Vijay Valecha, the chief market analyst at Century Financial Brokers, warned, “Forex and futures trading is a risky and high return investment.”
In general, they are very complex in nature, and therefore should be avoided by those who don’t have a strong background in the financial sector.”
Tyla Phillips, the financial planner at Guardian Wealth Management, said “investors do not invest in highly volatile instruments like forex and futures if looking to save for retirement.”
Find a Broker
Buying stock online requires the use of a brokerage platform. There are many different options available, each with its own pros and cons.
It is important that you select the right broker or also read the reviews of each broker.
Open an Account
Having selected your broker, you can create an account on their website.
To use the service, you should have a name, an email address, a phone number, and some sort of identification, but the steps vary between platforms.
Place a Deposit
You can deposit funds by logging into your broker account. Payment options vary from brokerage to brokerage; banks and debit cards are most commonly accepted by brokers.
Deposit the amount of money you wish to invest, be it AED 10, AED 100, or AED 500 according to your preferred payment method.
Place your order for Amazon Shares (AMZN)
Next, go to your broker’s stock buying page. See the current price of Amazon’s stock (AMZN) by searching for the ticker symbol.
If you like the price, place your order.
Complete your order
You will receive your shares in your account as soon as your broker executes your order.
Congrats on your Amazon investment!
Best Ways to Invest in Amazon in UAE
You should perform a thorough fundamental analysis of the company before you are investing your money.
As a general rule, invest in stocks you think will rise over time, even if the market fluctuates, rather than getting distracted by short-term spikes.
You should know when to invest in Amazon stock since stock prices often swing upward and downward trend. Finding the right time and price is essential.
Before you invest in Amazon ensure to check
- Amazon’s financial history
- Review Amazon’s financial statements
- Compare Amazon’s potential with your investment plan
Vijay Valecha, the chief market analyst at Century Financial Brokers, said that,
“Long-term investments in stocks, ETFs, and mutual funds have proven to perform better than almost every other asset class.”
“Mutual funds have the advantage that their investment is not very big, making it easier for everyone to invest.”
Tyla Phillips, the financial planner at Guardian Wealth Management, advised,
“Mutual funds can be an attractive alternative for investors wishing to invest smaller amounts, as they are a cheaper alternative to direct stock purchases and still enable adequate diversification.”
How to Choose a Broker in UAE?
In order to facilitate informed investment decisions, Dubai Financial Market (DFM) offers investors a wide range of information resources and tools. On its website, Dubai Financial Market (DFM) provides a comprehensive list of online brokers.
The choice of an online broker can be difficult when there are so many to choose from. Consider these factors when selecting an online broker:
- Availability of stocks
- Commissions and fees
- Rules & Regulations
- Accepted payment methods
- Trustworthiness
- Quality of service
Can Amazon Investing Be Risky?
Amazon is rarely a bad investment.
It has been one of the best-performing stocks often experiencing staggering price gains within a short period.
In addition, the company plans to enter several new markets, ranging from groceries to pharmaceuticals.
In recent decades, the company has become extremely popular among investors due to its rising share price and its forward-looking outlook.
If you want to get into the American stock market, Amazon is a great option.
Being a member of the FAANG group has a significant impact on the index.
If the stock moves up, it is more advantageous to invest directly in Amazon.com than through mutual funds or exchange-traded funds. Since indirect investment can yield lower than direct investment.
Conclusion
It is easy to become fascinated with the potential returns on Amazon investments if stock prices continue to rise.
Investing over time and diversifying is key to success.
A single stock of Amazon won’t make you rich. Successful investing involves diversifying your portfolio. Perhaps you should start with ETFs or mutual funds.
Before you can withdraw your money from stocks or trading, you need to stay in the market for months or years. This will yield greater benefits over time.
Any investment can lead to a loss of money. Investing in Amazon does not guarantee that you will make money. Before you invest in Amazon, think carefully.
Do not rely on one investment. The sooner you diversify and invest, the better your results will likely be later in life.
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