Are you wondering what are the best investment options in Saudi Arabia? According to the current trade trends, Saudi stocks are virtually outperforming other major markets. This article will list the best investment options in Saudi Arabia.
There are numerous popular investment options that one can make in Saudi Arabia, which are listed below:
Dividend stocks - These are known for their stability and ability to provide fixed income and growth on stocks and stock funds. Shareholders of this stock get regular payments from the companies. However, please note that some dividend stocks may not fetch profits or rise (in value) immediately.
Best for - The stocks can be bought by newbies to retirees depending on their investing journey.
Individual stocks - As mentioned above, individual stocks illustrate the company's share and have the highest potential to offer significant returns. However, it is also highly volatile in nature, so that one can expect a lot of fluctuations. This is one reason why people prefer mutual funds over stocks. Nevertheless, one can always invest in stocks based on their risk appetite.
Best for - These stocks are for everyone who can handle a risk and market volatility. As a word of advise, it is better to limit the individual stock holdings to 10% or less in the overall portfolio.
Best for - Mutual funds are best for long-term goals and retirement. It is a perfect opportunity to get exposure to the stock market investment returns.
Best for - Ideal for investors who do not meet the minimum investment criteria of a mutual fund as the share price of ETFs is a lot cheaper than mutual funds. Additionally, these are a good option for a long time horizon.
Best for - This is ideal for long-term saving goals, and it is favored by those who search for cost-effective and less volatile investments. Moreover, these funds have lower fund management fees.
Best for - Investors who wish to diversify their portfolio while adhering to sharia rules can utilize these bonds.
Best for - Perfect for conservative investors who dislike risk and volatility in their investment portfolio.
Best for: Investors seeking fixed-income security with possibly greater yields than government bonds and ready to accept risk in exchange.
Note: The higher the yield on corporate bonds, the greater the company's likelihood of failing. Bonds issued by large, reliable firms, on the other hand, would often have a lower yield. The investor's responsibility is to establish the risk/return balance that works best for them.
Numerous banks, such as Riyad Bank, Alawwal Bank, SABB, Arab National Bank (ANB), etc., help people open an account. You can contact any bank and seek their assistance in opening your account.
Best for - Everyone who wants to store their money safely and earn a certain amount of interest.
One can always explore the various deposits available in the nearby bank and choose the one that suits their goals.
Best for - It is a good investment option for a fixed timeframe. Deposits are a good investment idea if you want to save for a future purchase or event.
Best for - This is a good option for short-term goals
One can invest in REITs locally, regionally, and globally, as long as the total asset value outside the Kingdom does not exceed 25% of the total asset value of the fund. REITs are units representing ownership of the underlying real estate. During trading hours, REITs are traded on the Exchange alongside stocks. Furthermore, REITs are required by the Capital Market Authority to return at least 90% of the fund's net profits to unitholders on an annual basis (CMA).
Best for - Investors who already have a well-diversified investment portfolio and want to diversify further or are willing to take on greater risk to achieve higher returns. Because real estate investments are highly illiquid, investors should not put money into them that they will need to access fast.
In terms of governance and supervision, all the investment options discussed above must adhere to the
CMA's rules and regulations.
Nakla is the best place to make your investments wisely. It is a specialized platform that provides automated investment suggestions based on your preferences. The platform uses mathematical algorithms and advanced technology to make relevant suggestions. Furthermore, they have a user-friendly interface and helpful tools that help the investors make an informed decision.
What are some excellent investment options for short-term and long-term goals?
Mutual funds are an excellent choice of investment for long-term financial goals. They cover a range of stocks and provide good returns over 3-years and 5-years of investment. On the other hand, there are money market funds that you can try if you are interested in short-term investments. Apart from that, there are government bonds that mature in a few months to one year.
Investing in Saudi Arabia is slightly different from its western counterparts. Nevertheless, the basic principles of investment remain the same everywhere. Before investing, one must consider their financial goals, risk appetite, and other security and financial concerns.