Why to Invest in Land in Dubai - Case Study Example

Money Control: Case Study A good investment is taken in to consideration as a result into good returns. Investment always seeks for the best available options but the question is How to select the best available option so the answer is any option which fulfills the below mentioned, is a good investment option Low risk, Good return and Short span of time For the entire those critical motives there are two investments may be the most important be to expand or increase our appropriation fund for being our current life expectation higher than before. Nowadays, investments are the foundation of our future economic level. Bad investments can take us negative turnovers and consequently reduce our upcoming potential. According to the government department of financial investigation, personal savings of North Americans are very short comparing them to other urbanized countries. A low savings interest rate designates that North American citizens are gathering enough savings as to carry out successfully any emergency, and keep the life standard after retiring. (www.beginnermoneyinvesting.com) Why to invest in land in Dubai Dubai is an admirable place to own an investment property, as it is one of the fastest growing economies on the map. Well-appointed apartments and shopping investment properties are available in this fast growing economy. Dubai's free market move toward to consumer goods and business help it to develop at a lightening place keeping up with or far beyond any lavishness that could be found elsewhere. But what stands out the most about this glorious Middle Eastern spot is its forward thinking. Without being content on the developmental success of the current times, Dubai has a plan in place to ensure that it continues to increase and shine. (Property Frontiers) Dubai constructs an excellent choice for investment properties because from the hot sands of the Middle East the imposing towers and glorious buildings rise up to form a haven of beauty. Unvarying sun and sand have made it a playground for the rich and famous that never closes, never snowed out, and always posh and well-appointed. Property in Dubai is in highly required and there is not enough of it to go around and therefore investment properties are being cracked up quickly as they are developed. Investment properties in Dubai have detained their value where most of the world's land values have fallen significantly. These belongings can change hands swiftly. The active interest in this top retreat spot coupled with new found ability of foreign investors to be able to own land there has made it one of the most profitable parts of the world for real estate investment properties. (Afshin Molavi). Why to invest in gold Thought to be one of the first known metals, gold has been desirable throughout history for its splendor, insufficiency, flexibility, and strange resistance to tarnish and deterioration. Centuries ago, gold's unique combination of properties -- its sun-like color, its soft stiffness, and, above all, its immunity to decay and corruption – permeated it with magical relations in the eyes of many. Because of these unique properties, gold has conventionally been the currency of choice for much of the world's population. The value of gold has rise above all national, political, and cultural borders, making it the ideal currency. In olden times gold prices were unwavering by an arrangement of political and economical factors, till a generally tolerable concept of London and American gold price was institutionalized. An outcome of such proposals was the Washington Agreement. However, in the past few years, the major factors impacting the gold price can be summarized as under: Weak US dollar Growth in demand for ornaments. Rise in demand for exchange-traded paper backed products. (World Gold Council ) Why to invest in fixed deposits UAE fixed rate deposits currently offer significantly higher yield that US funds bonds with no capital risk. For confined savers bereft of other investment options during the universal monetary disaster these bank accounts have proven a safe haven in a blizzard. Certainly, locking in at these rates still makes good intelligence as the global economic crisis seems far from over. The dirham is also freely exchangeable at a very diminutive cost into US dollars, so this is well a way to earn ten times Fed rates on a US dollar proxy with a guarantee from the UAE. (Peter Cooper) It is important to know that markets environment isn't like other social environment in our every day life. To become successful in markets surroundings we require a very high degree of self-control and self-trust. Trading environment is a completely free field; there is no outer arrangement to restrict it. In fact, we can't control or influence the market. Also, marketplace has no control over us. We are responsible for results, we should know that we only can control ourselves and must learn to adapt to the market environment. Disadvantages of trading markets Many beginners undervalue the difficulty of trading and overestimate their ability as a beginner; also they have a lot of opportunities. Therefore, most of them lose money and contaminate some degree of psychological damage upon them. When those traders can't achieve their expectations, a divergence created between their beliefs about how things should be and the actual conditions that don't match their beliefs. This divergence causes tension, panic, anxiety, confusion and so on. Advantages of trading markets Market is an environment with everlasting motions; these motions proffer traders the opportunity to profit from them. Market is such as an ocean, if we act very well, it wills rewards us very well. Many jobs have fixed hourly remuneration or monthly salaries, our effort not rewarded and passing time makes money for us. But in the market there is no association between time and reward. We can make a lot of money in a short time depend to our effort and skills. To be come successful in the trading environment we require a very high degree of self-control and self-confidence. So we should always try and train to improve behavior and skills. This understanding helps us all over life. Trading Market's Disadvantages: people underestimate market, people have inflated expectations and People cause damage on themselves. Trading Market's Advantages The high potential of the market, Reward isn't depending on time and Practical experiences for all life. Investment in Equities listed with New York Stock Exchange AutoZone, Inc. and Borders Group, Inc. are the two equities which attracted me to invest. Basically both of these are from different industries but as per my specification of investment, I found these two as quiet lucrative. AutoZone, Inc. is a retailer and a distributor of automotive substitution parts and accessories. As of August 30, 2008, the Company activated 4,092 stores in the United States and Puerto Rico, and 148 in Mexico. All of its stores carry a product line for cars, sport utility automobile, vans and light trucks, together with new and remanufactured automotive hard parts, preservation items, accessories and non-automotive products. The Company also deals in the ALLDATA brand automotive investigative and repair software. On the Web, AutoZone, Inc. put on the market diagnostic and repair information and automotive hard parts, maintenance items, accessories and non-automotive products through www.autozone.com. The Company does not obtain revenue from automotive repair or mechanism services. (NYSE) Borders Group, Inc., through its supplementary, operates book, music and movie superstores, and mall-based bookstores. The Company's operating subsidiaries include Borders, Inc. (Borders), Walden Book Company, Inc. (Waldenbooks) and Borders Australia Pty Limited. The Company's operates in three segments: Borders Superstores, Waldenbooks Specialty Retail stores and International stores. At January 31, 2009, it operated 518 superstores under the Borders name, including 515 in the United States and three in Puerto Rico. The Company also operated 386 mall-based and other small format bookstores, including stores operated under the Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores. On June 10, 2008, the Company sold all of the outstanding shares of Borders Australia Pty Limited, Borders New Zealand Limited and Borders Pty. Ltd. to companies affiliated with A&R Whitcoulls Group Holdings Pty Limited. (NYSE) Investment in Government Bonds A government bond is a bond issued by a national government denominated in the country's own currency. Bonds issued by national governments in foreign currencies are normally referred to as independent bonds. The first ever government bond was issued by the English government in 1693 to elevate money to fund a war against France. It was in the form of a tontine. Risk Factor Government bonds are generally referred to as risk-free bonds, because the government can move up taxes to redeem the bond at maturity. Some counter examples do exist where a government has defaulted on its domestic currency debt, such as Russia in 1998 (the "ruble crisis"), though this is very rare. As an example, in the US, Treasury securities are denominated in US dollars. In this instance, the term "risk-free" means free of credit risk. However, other risks still exist, such as currency risk for foreign investors (for example non-US investors of US Treasury securities would have received lower returns in 2004 because the value of the US dollar declined against most other currencies). Secondly, there is inflation risk, in that the principal repaid at maturity will have less purchasing power than anticipated if the inflation outturn is higher than expected. Many governments issue inflation-indexed bonds, which should protect investors against inflation risk. The protection has been questioned by John Williams' ShadowStats.com, which claims that government-calculated inflation is understated by as much as 5 percent, which also makes inflation-indexed bonds yield a loss. In a US government bond, it is a debt on top of existing debt . where the US government exchanges with the Federal Reserve a US government bond in exchange for fiat currency in the denomination value of the bond. My parameter of investment My parameter of investment is based on three factors that’s risk factor, rate of return and tenure. Let us check these three in all the available options As far as my view is concern I always look for low risk. Let us check this factor with all the available options. If we talk about investment in land in Dubai, of course the risk factor is low but due to the subprime crisis in US markets this sector is also in danger. Investment in gold is quite a safe game but due to different currency conversions rates and SDRs this option is not as such lucrative. Although the investment in fixed deposits is safe and secure but it doesn’t ensure the application of ones wise decision making and finally it takes long time. In today’s globalised and most active world there can be no other active option as investment in share is. Government bonds are the safe returns of the money but it may not be taken as a wise decision. Investment in government bond does not require any kind of technical or analytical study. So that is not going to pay more. Since my objective for the investment is to earn more money in a short span of time, I would like to invest in share market. Validity of my investment decision Investment in share market is not a childish game. Since this is the only option which can give a good return in a short span of time ,it requires a lot of study related to the particular issue as well as the study of capital market . I have chosen two equities listed with NYSE AutoZone, Inc and Borders Group Inc. AutoZone Inc is a specialty retailer and a distributor of automotive replacement parts and accessories Borders Group, Inc., through its subsidiaries, operates book, music and movie superstores, and mall-based bookstores. Though these two are from Different industries yet due to a consistent performance in NYSE I have chosen. It may vary from person to person that what should be the parameter of investment. As per my view is concern I would prefer to earn more money in short span of time. If we look at the risk factor , there is always a risk in every step of life .Investment validates the application of ones skill , knowledge ,endeavor to take risk, long term sustainability, patience and experience.My ultimate decision to invest in share market fulfills all my requirements that’s why I have selected this option. References Cooper,Peter. Grab UAE fixed deposits now, rates coming down, High rates,last modified on March 18,2009 available at < http://arabianmoney.net/2009/03/18/grab-uae-fixed-deposits-now-rates-coming-down/> Molavi,Afshin in Dubai Watch, Talent, critical mass drive Dubai forward last modified on January 01,2008 available at < http://www.rascott.com/Dubai/dubai_watch.htm> Property Frontiers in Properties By Investment Specifications, Properties in Dubai last modified on January 2008 available at < http://www.propertyfrontiers.com/International-Real-Estate/Investment-Specifications.aspx> World Gold Council, Investment In Gold last modified on January 2009 available at < http://www.invest.gold.org/> www.beginnermoneyinvesting.com in Reasons to Invest Money Available at < http://www.beginnermoneyinvesting.com/html/reasons_why_to_invest.htm > Read More