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How wise is it to invest in stocks in the current pandemic and how do you go about it, if you want to?

Dubai: Although investing in stocks is a common way for beginners to gain investment experience, it is often perceived as a more complicated investment option. But professional investors refute this myth.

People watch trading boards at a private stock market gallery in Kuala Lumpur, Malaysia. Picture used for illustrative purposes.
Image Credit: AP

Dubai: Although investing in stocks is a common way for beginners to gain investment experience, it is often perceived as a more complicated investment option. But professional investors refute this myth.

Gauging the market’s highs and lows, assessing the market risk and figuring the right time to invest in stocks seems like a complex process. Yet, it has been proven to be one of the most lucrative investments.

Gulf News talked to investment experts to know how one can navigate through the world of stocks with ease.

The basics of investing in stocks
The basics of investing are quite simple in theory – buy low and sell high. In practice, however, you have to know what ‘low’ and ‘high’ really mean.

But at the very least, investment professionals advised novice investors to know basic metrics such as book value, dividend yield, price-earnings ratio (P/E) and so on.

What to research beforehand?

‘Book value’ is the value of a company’s assets recorded in the books.
‘Dividend yield’ is dividend divided by share price – typically a yield of 4 to 6 per cent is considered good.
‘P/E ratio’ is share price divided by the earnings per share – a higher PE suggests high expectations for future growth, but a low PE suggests company is more likely to outperform earnings forecasts.


After knowing the basic terms, other important to-dos include researching how the stock has fared compared to its peers in the industry, seeking to understand how the company has been reporting its results, understand analyst perspectives on the stock, while also researching the company’s leadership.

The more information you have on a sector or stocks – better the chances you have at succeeding when it comes to investing in markets,” said Issam Kassabieh, Chief Financial Officer at Urent, having analysed UAE-listed stocks’ performance on the stock markets.

Issam Kassabieh

While you are learning, it’s always good to start out by using virtual money in a stock simulator.

Most likely, you’ll find that the market is much more complex than a few ratios can express, but learning those and testing them on a demo account can help lead you to the next level of study.

Some of the popular platforms include ‘TD Ameritrade’, ‘Wall Street Survivor’ and ‘MarketWatch’.

Have clear goals


Image Credit: iStockphoto

One of the first steps to investing wisely in the stock markets is to clearly define your investment goals. Age, income and attitudes about risk all need to be taken into consideration when determining which investments may be right for you.

Anita Yadav

Shares might be a little bit riskier than, let’s say, bonds,” said Anita Yadav, a seasoned markets expert with experience in diverse financial markets. “Investing in real estate maybe safe but it’s illiquid versus bonds and shares.”

Nisarg Trivedi said that if you are saving for a particular event, be it buying a house or education, then you can afford to take a little bit more risk as your portfolio can ride through the cycles.

Nisarg Trivedi

If you are young and can afford to take risk then you should focus your portfolio towards shares, but if you are a little bit older and want safer options your portfolio should be more skewed towards bonds,” said Nisarg Trivedi, a Middle East director at Schroders Investment.

Step back and reflect on your short- and long-term goals, such as funding college for children, business expansion, travel plans or retirement needs. Next, you need to understand your tolerance for risk, which differ with each investor.

Your tolerance for risk is a difficult personal decision, but this is something that a financial advisor should help us determine.

– Nisarg Trivedi, a Middle East director at Schroders Investment

Younger people with a longer time horizon seen as more risk-tolerant, and therefore more likely to invest in stocks and stock funds than fixed income.

But regardless of age, those with a higher net worth and more so-called liquid capital to spend can afford to have greater risk tolerance than those who are more cash-strapped.

As for new investors, they often have two questions when starting out: How much money does one need to start investing in stocks, and, how much money should be invested?

But before that, a novice investor needs to decide what represents best how you want to invest, and how hands-on you’d like to be in picking and choosing the stocks you invest in.


Image Credit: Pixabay

What’s next?

You are either the do-it-yourself (DIY) type and interested in choosing stocks and stock funds or, you already know the stock-buying game and just need a brokerage or someone to manage the process.

“To invest in stocks, you need an investment account,” Trivedi added. “For the hands-on types, this usually means a brokerage account. For those who would like a little help, opening an account through a robo-advisor is a sensible option.”

Opening a brokerage account

Opening a brokerage account

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A brokerage account is an investment account you open with a brokerage firm, using it to buy investments.

The broker holds your account and acts as an intermediary between you and the investments you want to purchase or sell. If you want to purchase and manage your own investments, a brokerage account at an online broker is for you.

Setting up a brokerage account is a simple process!
You can typically complete an application online in under 15 minutes.

Once you’ve opened the investment account, you’ll need to initiate a deposit or funds transfer, which is mostly given in a step-by-step easily understandable form in most websites. Once the transfer is complete and your brokerage account is funded, you can begin investing.

However a key risk to keep in mind is that you might be asked if you want a cash account or a margin account. A margin account allows you to borrow money from the broker in order to make trades, but you’ll pay interest and it’s risky. Generally, it’s best to stick with a cash account at first.

When choosing an online stock broker, experts say fees, platform features and security are some key considerations.

Profitable investing requires you use a brokerage service that aligns with your investing goals, educational needs and learning style. In an ideal brokerage, you should check whether or not the platform allows you to trade the securities you’re interested in, to how easy it is to get support from an actual human when you need it.



Safety Checklist

As part of your safety checklist, you need to check whether the brokerage a member of the Securities Investor Protection Corporation (SIPC) and a member of the Financial Industry Regulatory Authority (FINRA).

There will typically be some kind of notation or disclaimer at the bottom of the home page. But if not, you can quickly look up the brokerage on these websites:

  • SIPC website –;
  • FINRA’s BrokerCheck website –

A robo-advisor is a service that offers low-cost investment management and virtually provided by all of the major brokerage firms, investing your money based on your specific goals.

Popular types of investing

For most people, stock market investing means choosing among two investment types, stock mutual funds or exchange-traded funds (ETFs), or individual stocks:

• Simply put, a stock fund is a type of mutual fund that invests primarily in individual stocks of companies trading on a public exchange – typically allocating at least 80 per cent of the portfolio assets to stocks. The upside of stock mutual funds is that they are inherently diversified (having different types of stocks in the same portfolio), which lessens your risk.

• A mutual fund is a basket of various investments, such as stocks, bonds, and cash. Each of these types has a different risk level associated with it. Index funds and ETFs are a kind of mutual fund that track an index (benchmark of multiple stocks). An ETF is a fund traded on stock exchanges, much like stocks, and holds assets such as stocks and others.


A well-balanced portfolio is one that is wisely diversified
Image Credit: Gulf News

Diversify, diversify, diversify

If you’re after a specific company, you can buy a single share or a few shares as a way to dip your toe into the stock-trading waters, the experts advised. Building a diversified portfolio out of many individual stocks is possible, but it takes a significant investment.

In my opinion, in times of economic growth invest more of your portfolio in 70 per cent shares and 30 per cent bonds. In times of an economic downturn, invest in no more than 70 per cent bonds and 30 per cent of your portfolio in shares

– Giles Coghlan, Chief Currency Analyst at trading broker HYCM

Now coming to how much money you should invest. The amount you need to buy an individual stock depends on how expensive the shares are.

If you want have a small budget, an ETF may be your best bet. Mutual funds often have a higher minimum startup investment requirement than ETFs, which trade like a stock and means you purchase them for the share price value,” Trivedi said.

How can one go about investing in exchange-traded fund (ETF)?

Image Credit: Shutterstock

What to steer clear of?

There are many reasons why some investors prefer not to invest in the stock market. Being risk averse, limited or no knowledge and expertise, a bad experience or being just a beginner are some of the reasons to remain out of it.

Although markets can be unpredictable, in the long-run, they can provide comparatively higher returns than other low-risk assets or securities, the investors explained. This is why it is a necessity in the overall investment portfolio, with the proportion being different for different investors.

The biggest mistake that investors starting out make is to invest all their money in one particular share and over expose themselves to one market

– Giles Coghlan

RDS_181119 Change in charges

Charges in fine print – look out for fees

One thing, however, that is easily overlooked and important to understand is the fees you’re paying. A number of investors cited hidden fees as a proven hazard for a newbie investor.

A diverse portfolio tend to offer lower fees than actively managed mutual funds — in the past few years some have eliminated management fees entirely. Paying high fees risks eroding a significant percentage of your earnings.

Over time, investment fees can consume thousands of dollars in potential earnings.

Investment charges are broadly categorized into two. One is ‘fund management’ charges and the other is one is the ‘incidental fees’ or minor expenditures associated with the investment.


Tax graphic
Image Credit: Pixabay

Transparency and taxation

“These (charges) are revealed transparently by asset managers, as they are under significant scrutiny by regulators,” Trivedi said.

If there are any other fees the investors should be made aware about it or told about it in advance, and if there is something that they come across maybe it’s time to switch investment managers

– Nisarg Trivedi

When we are talking about listed securities and if you are using a manager and able to invest in a fund, then one also needs to be aware of performance fees and quite often ‘setup’ and ‘exit’ fees as well, Yadav said.

Another element to be aware of is post-tax returns versus pre-tax returns as a lot of us just focus on the gross return, while not understanding that at the end investments are tax payable and taxes are kind of a fee as well

– Anita Yadav

She added that there may also be FX (foreign exchange) charges, depending on whether you are investing in a product of a different currency, possibly triggering a substantial conversion risk.

Forex risk, a tricky situation
Foreign exchange risk is a financial risk that exists when a transaction is denominated in a currency other than the domestic currency of the company. Also known as currency risk and FX risk, it describes the possibility that an investment’s value may decrease due to changes in the relative value of the involved currencies. To eliminate forex risk, an investor would have to avoid investing in overseas assets altogether or to invest in hedged assets.

What does the UAE offer?

Traders at the Dubai Financial Market (DFM)

Image Credit: Gulf News Archives

Most investment products offer global baskets in the major markets. Kassabieh explained what stocks retail investors can look at locally.

• “Defensive sector stocks are extremely important to hold because they act as a safety net at troubled times and can balance a portfolio once the market is retreating,” Kassabieh said. “Also, they tend to pay annual dividends, which reduce initial cost and eventually act as a gain on investment.”

• In the UAE, the banking sector along with the telecom sector are considered defensive sectors and Kassabieh said they could be “very healthy” picks to have in one’s portfolio. However, he added that telecom stocks lack variety, as there are only two listed telecom stocks Emirates Telecommunications Corporation (Etisalat) and Emirates Integrated Telecommunications Company – commercially rebranded as du.

• “Aside from the defensive stocks, it is recommended to have high-growth sector stock such as pharmaceutical, healthcare and education stocks – although only a few are listed – as these stocks tend to grow rapidly at their early stages and when successful can turn into defensive high yield stocks,” Kassabieh said.


Inside view of the Dubai Financial Market (DFM).
Image Credit: Pankaj Sharma/Gulf News

The UAE Securities and Commodities Authority and the UAE Markets themselves – Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX) – have a list of licensed and active brokers on their websites.

• While there are iShares MSCI UAE ETF and WisdomTree Middle East Dividend Fund that are two ETFs with heavy UAE weighting, REITs are also a proven option for local investors.

Perks of REIT investing
REITs (Real Estate Investment Trust) allow investors interested in making gains from the real estate market to invest their money in a fund managed by experienced professionals that have allocated the gathered funds across a diverse basket of real estate products varying from residential, retail, office, to social infrastructure such as school and hospitals.

In the UAE, currently listed REITs include Emirates REIT and ENBD REIT, both Sharia compliant, listed on Nasdaq Dubai and have been active in the UAE market since they were listed.

​• Although ​​​​​​REITs have been a popular choice since their listing and had decent trading volumes over the past years – despite the market being in decline – they recently however have been seeing lower levels of trading.

​• This is the reason why the ENBD REIT is looking to delist from Nasdaq Dubai and Emirates REIT has formally complained of its share price trading at unusually low levels.

• The number of listed REITs in the UAE is undoubtedly set to grow after the DFM last year published rules on listing and trading REITs as a precursor to launching its REITs platform in the very near future. Masdar, a unit of Mubadala Investment Co, in January launched a sustainable real estate investment trust, with a  valuation of up to Dh1 billion.

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Demo Trading

Use Demo, Do NOT Over Abuse It

Use Demo, Do NOT Over Abuse It

All  psychologists say that every person needs to know itself and to know his or her own level of patience and anxiety levels, and that practice is a good way to do. But do not abuse it. I think it works in the same way with the Forex demo accounts. Too much demo really sucks and will never prepare you for the real trading. Trading demo too much time won’t make you a better trader but a better loser. Once you know how to use the tools on your trading platform and you have the basis of the trading, close the demo and get on real money. You don’t need six months for that. Think it in this way: if an average human life is 70 years, no one needs more than one single year to learn how to walk. Here are a few tips for you:

  • Even if you are on real money now, you can still use the demo to test a new strategy (strongly recommend to be your own strategy and not someone else’s) or you can use the demo to test how a new instrument acts. For example when Bitcoin was launched, the demo account was a better choice than the real money account, to see how BTCUSD is trading.
  • If you like the automatic trading, you can use the demo to test the EA you just bought or maybe build one yourself.
  • When you start to trade on demo, at least ask your broker to make the demo as big as your future real money account. Is really useful to trade 50000$ on demo while you will only deposit 1000$ when opening the real account.
  • Even if you trade on a demo account, – meaning simulated market conditions – I suggest making realistic assumptions. Use a margin of one up to five pips when you place your entry, stop losses or take profit orders as in the real market conditions quite often happens to see them executed at a different value than what your set ups – especially for entry orders.
  • The simulated trading environment does provide a trader with the opportunity to get used to the software he will be using or with his broker’s trading conditions. Use the demo account only for this purpose and do not try to build a reputation by linking the account on websites as or because no one cares how good you are on demo.
  • Least but not the last, try to avoid the demo accounts with unlimited use. If you can’t stop to trade on demo your broker will, by denying you the access to the demo and inviting you to open the real money account.

the Demo accounts are there for you to get started and actually understand if the broker you have chosen is the right one for you. but it is also like when you play a game on your mobile and you play against someone who bought his levels , no matter how good you are his tools will kick your ass every time. forex works much in the same way . in the end you can simulate only so much before it becomes redundant.

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Demo Trading

The Importance of Demo Trading and Your Demo Account

The Importance of Demo Trading and Your Demo Account

I see that some traders believe that demo trading is not a good practice because you know that you are trading with the demo money, and so you don’t trade with discipline. They believe demo trading causes the novice traders not to learn to trade with discipline, and this will be ended to failure finally. When you know you are not trading with your real money, then you don’t care to lose, and so you can make all the possible mistakes, like taking positions with any trade setup (either weak or strong) you see, taking positions while there is no trade setup, over-trading and… . It will be a disaster if these bad actions become a habit in you.

This is true only when you are not a serious learner and you are practicing Forex just to see what it is. So you open a demo account and you take some positions to see how it works. You don’t care if you lose.

However, when you are serious to become a professional and full time-trader, and when you want to make a living through trading, then you should behave completely different.

Before you open a demo account and start demo trading, first you should learn everything you need to know. I have explained this in details here: Do You Think You Are on The Right Track to Become a Profitable Trader?

First complete your knowledge and then start demo trading. Spend enough time to follow the videos and articles I have listed in the above article. If you start demo trading while you are not ready yet, you will only make yourself confused, frustrated and disappointed. Forex makes money. Do not let your mistakes make you think that you can not make money through Forex.

Now let’s say you have learned everything you need to learn, and now you are ready to gain experience through demo-trading. This is a very important stage that if you don’t pass properly, you will not become successful with live trading.

Aren’t you here to make money through forex trading finally? If the answer is yes, then you should pass all the stages very carefully and patiently, otherwise you will not get any good result. I can not emphasize on this more. It is very important.

Make sure to read the below articles carefully:

  1. How To Become a Successful Forex Trader
  2. Are You Still Looking for the Forex Holy Grail?
  3. Do You Think You Are on The Right Track to Become a Profitable Trader?

There are a few things about demo-trading I have to emphasize on:

1. Take the demo trading as serious as possible. Forget that it is the demo money and nothing happens if you lose. You can blow up your live account as easy as you blow up a demo account. So, when you open a demo account, forget that it is a “demo” account. Treat it as a live account and your real money. Do you like to lose money with your live account so easily? If not, then do not lose with your demo account so easily too.

The discipline you need for Forex trading is something that you have to “build” in yourself. You have to “build” it on your own. And demo-trading is the foundation of your “Discipline Building”. If you trade carelessly with your demo account, you will do the same with your live account too. If you take positions with your demo account while there is no strong trade setup, you will do the same with your live account too. If you over-trade with your demo account, it becomes a habit, and you will do the same with your live account too. If you…

Conversely, if you forget that you are “demo” trading, and you take your demo account as serious as your live account and real money, and you wait for the strong setups only, and you do not over-trade and you don’t take too much risk, and you set the stop loss and target properly, and you care about the losses as you care about losing with your real money, then the discipline you need to have to make money through Forex trading, will be built and matured in you, and you will be successful with your live account definitely.

2. Make sure to keep on demo trading and not to open a live account, as long as you have not been able to repeat your success with your demo account.

Does it make sense to open a live account and trade with the real money while you have not become able to make money with the demo account yet? If it doesn’t make sense, why are you trading with a live account then? You think live trading is different? It is not. When you lose with the demo account, you lose with the live account too. If you are not knowledgeable, experienced and disciplined enough to make profit with the demo account, you will not make profit with the live account too.

You will always have time to open a live account and start live trading. Don’t do it when you are not ready yet.

3. Your demo account size has to be the same as your live account size. I mean if you are supposed to open a $1000 live account in future, then practice with a $1000 demo account too, and do not open a $100,000 demo account for example. This helps you behave with your demo account exactly as your live account. This helps you take your demo account serious.

Keep in your mind that your demo account has to be treated exactly as your live account. Although you open a demo account for free, but it is not “free” in reality. You are spending your time on it. You are building your experience and discipline with it. So not only it is not free, but it is too expensive and valuable. It is the “foundation” of your business.

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Demo Trading

NinjaTrader Review 2020: Pros, Cons, Fees & More • Benzinga

If you’re on the hunt for the best online brokerage, Ninja Trader is a great fit for both new investors and seasoned traders. Some of the key features in NinjaTrader’s futures brokerage service include:

If you’re on the hunt for the best online brokerage, Ninja Trader is a great fit for both new investors and seasoned traders. Some of the key features in NinjaTrader’s futures brokerage service include:

  • Commissions as low as $.09 per Micro contract
  • Low $400 account minimum
  • Low day trading margins of $500 per contract for E-mini S&P 500 (ES), Nasdaq (NQ) and Dow Jones Industrial Average (YM) stock index futures contracts
  • $1,000 margins for Gold (GC) and Crude Oil (CL) futures contracts
  • Free version of NinjaTrader platform included with all brokerage accounts
  • Three platform license levels with varying feature sets and commission rates

In addition, the broker offers competitive spreads and a high-speed execution service for forex currency pairs.  

Who’s NinjaTrader For?

Futures Traders

NinjaTrader’s brokerage services cater directly to futures traders. It’s the ideal destination for those both active and new, with unlimited free use for advanced charting, market analysis, and simulation trading.

Advanced Traders

NinjaTrader’s state-of-the-art trading platform has a variety of features available across three license levels that allow traders to select the best fit for their trading approach. There are two upgrade feature sets available, Trader + and Order Flow +.

While advanced charting, market analysis, and simulated trading are included free for all users, licensing Trader + or Order Flow + gives you access to premium tools such as an enhanced SuperDOM, an advanced alerting system, semi-automated order execution, volumetric bars, and other sophisticated charting systems.

Active Traders

With commission among the lowest in the industry, traders can keep their costs low on a per contract basis. NinjaTrader’s low margins are also a great fit for active traders. With numerous technical analysis tools available, the trading platform can help users target opportunities and manage execution in volatile markets.

NinjaTrader has their flagship advanced trading platform for Windows-based desktop computers. Other third-party platforms are supported and available by request. If you are a Mac user, you can run the software using a multi-boot utility like Apple Boot Camp.


NinjaTrader features a wide range of technical analysis functions that can be useful for those starting out with demo trading — especially if you want to learn how to trade futures.

The broker uses CQG (Continuum) for order routing by default but also supports order execution through Rithmic. Kinetick is also available as a free end of day market data source for stock, futures and forex data optimized exclusively for use with NinjaTrader’s platform.

If you’re interested in trying out the NinjaTrader platform using futures data, you can register to get a free two-week trial.

A free version of the NinjaTrader platform is included with all funded brokerage accounts and has all the core features needed for live trading, with access to charts, market analysis, and simulated trading.

If you want to access some of its more advanced capabilities, you can either lease the software starting at a quarterly basis or purchase a Lifetime license, which includes free upgrades for life.

The advanced tool sets are where NinjaTrader really shines. For example, sophisticated order types known as automated trade management (ATM) strategies are included in the Trader + feature suite. These consist of a set of specific rules you create to manage a group of stop-loss and profit target orders to operate on all or part of an open position.

NinjaTrader’s third-party developer community, known as NinjaTrader Ecosystem, features thousands of third-party apps and add-ons you can use with its trading platform. From their website, you can use the keyword search and filters to scan hundreds of custom tools and trading indicators built to work with NinjaTrader.

If you have programming skills, you can build compatible software within its advanced C# based development environment.

The NinjaTrader platform provides a high-performance backtesting engine which allows users to test and verify futures trading strategies using historical data. A wide range of useful educational materials are available if you’re unfamiliar with its platform and wat to enhance your skills.

These include daily training webinars designed to educate new users on the powerful tools available, hundreds of on-demand training videos, help guides, and an informative YouTube channel.


NinjaTrader’s Commission and Fees

Commission and margin requirements are among the lowest in the industry. A $1,000 minimum initial deposit is required to fund a new account and commissions go as low as $.09 per Micro contract with a Lifetime license. Day trading margins of $500 for ES, NQ and YM contracts, and $400 for GC and CL contracts are also very low.

When it comes to platform fees, the broker’s advanced platform and live data are available free of charge for use in a demo account. For live trading, you can use their free platform with all the basic essentials or choose a paid license level for more advanced features and lower commissions.

If you lease or buy a Lifetime license for the trading platform software, you also gain access to a suite of premium features that include its advanced trading management (ATM) strategic order handling. Traders who purchase a lifetime license also get the Order Flow feature set which comes with free platform upgrades for life.

NinjaTrader’s Security

NinjaTrader is well-regulated in the United States by the National Futures Association and the Commodity Futures Trading Commission (CFTC).

NinjaTrader’s Customer Support

NinjaTrader’s online support team excels in prompt replies with inquiries addressed within 15 minutes during market hours. An active user community interacts directly with the NinjaTrader support team in their User Forum. They also host daily live training webinars, have hundreds of on-demand training videos, and more.

NinjaTrader can be reached by email, phone, and an online support form for customer service. For critical trade issues, NinjaTrader provides direct phone support for brokerage clients. International traders are also directly supported with dedicated Spanish, Russian and German brokerage service teams. 

NinjaTrader’s Tradable Asset Classes

NinjaTrader brokerage offers a basic range of asset classes with a focus on futures trading on the CME, CBOT, NYBOT and Eurex exchanges. You can trade the following asset classes via NinjaTrader:

  • Futures 
  • Forex 
  • CFDs
  • Stocks*

*The platform can also be used through other supporting brokers such as TD Ameritrade or Interactive Brokers to trade stocks.

NinjaTrader’s Ease of Use

After downloading the NinjaTrader platform, it’s best to spend some time on the forum and watch the tutorial videos provided. It may take some time to set-up your ideal dashboard.

While NinjaTrader’s platform is exceptionally customizable and offers numerous advanced features, it may not be considered easy to use when you first download the platform.

Final Thoughts

NinjaTrader is one of the top brokers for futures and forex trading. The unlimited use of its free platform is a great way to get acclimated to NinjaTrader before deciding to trade live.

The free platform is sufficient for new traders with more advanced tools available as need such as semi-automated execution. NinjaTrader’s low commissions and fees, free tools, and an active community forum will work to any trader’s advantage.

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