Back in March, the outlook for investors looked considerably uncertain.
Geopolitical conflict unsettled Gulf markets, inflationary pressures were building and interest rates appeared likely to remain higher for longer. Against that backdrop, it would have been reasonable to expect retail investors to reduce their exposure, hold more cash and wait for greater clarity.
But that is not what happened. The market experienced a sharp initial sell-off yet the response from investors has been more considered than defensive. Rather than abandoning the market altogether, many have continued to invest while reassessing where they see resilience and opportunity.
Seven months on, etoro’s latest UAE Retail Investor Beat, a survey of 1,000 retail investors in the country, suggests that UAE retail investors are not simply feeling more confident; they are becoming more selective about how they express that confidence.
The Market that Didn’t Wait
Gulf equity markets had already lived through the sharpest test of the cycle well before the third quarter began.
The DFM General Index fell as much as 16% in March alone, and the ADX had its worst month in six years. Yet seven months on, the ADX sits roughly flat for the year, while the DFM remains a little further behind. Either way, the worst-case scenarios entertained back in March have not materialised, and recovery has followed.
This does not mean risks have disappeared. Gulf energy supply and shipping through the Strait of Hormuz remain disrupted, delaying the inflation cool-down central banks had expected. Interest rates are still elevated, adding pressure to markets and household finances.
What has changed is the way investors appear to be responding. The market’s recovery from its March lows has not been accompanied by a return to blanket optimism. Instead, investors seem to be distinguishing between short-term disruption and long-term fundamentals, staying engaged with the market while looking more carefully at which sectors and companies are best positioned for what comes next.
What Retail Investors are Doing
This is where our own research adds something the index-level numbers can’t: a picture of what people plan to do with their own money, not just how the markets moved.
With the market having gone through its worst phase, 82% of UAE retail investors now expect the local stock market to rise over the next 12 months, up from 76% in March and the highest reading since we started tracking the question in November 2024.
Confidence in the long-term performance of UAE-listed companies has climbed to 93% from 90%. More retail investors than ever (58%) now expect the Middle East to deliver the strongest long-term returns of any region, ahead of the US (47%) and China (35%).
Crucially, this isn’t just sentiment. Among investors who did adjust their portfolios in response to the conflict, the share who reduced their exposure to UAE equities has fallen to 14%, down from 25% in March.
Rates add another layer to that picture. Asked directly how a ‘higher-for-longer’ rate environment is shaping their plans, investors lean firmly toward doing more, not less: 71% say they will invest more. Just 6% say they plan to invest less, and 21% say elevated rates won’t change their plans either way.
It also points to where that extra money is likely to go. Asked where they would allocate more if rates stay elevated, investors named commodities like gold and oil most often (40%), followed closely by real estate and property funds (39%), growth-sector stocks (28%) and cryptoassets (28%).
Close to a quarter (23%) also pointed to cash or short-term savings, a reminder that ‘investing more’ doesn’t mean the same thing, or the same appetite for risk, for everyone.
Investors are More Selective, Not Pulling Back
When asked about sectors in the UAE, optimism about the energy sector has fallen from 42% to 35% and financial services from 37% to 33%: both areas with more direct exposure to conflict-related disruption and rate sensitivity.
Real estate, by contrast, climbed from 54 to 58%, and technology has held broadly steady around 49%. Investors are also increasingly citing long-term security as an investing goal, now 49%, up sharply from 34% in March.
Put together, that looks like the early signs of a reallocation rather than a pullback: sentiment moving toward the parts of the market seen as better insulated from the conflict and the rate cycle, even if it’s too soon to say how much of that has yet turned into actual portfolio moves.
Built for a Market Like This
This is the argument for how people should be investing right now.
Being confident in the UAE story doesn’t mean treating every sector the same way, and being cautious about rates doesn’t mean sitting on the sidelines. The investors in our survey seem to understand that instinctively: they are staying in the market, but choosing more carefully where.
Moving between asset classes like that is far easier when a single platform gives access to the full range of them – equities, commodities, currencies, crypto and more – without having to move capital between different apps or brokers to act on a shift in conviction.
The same logic applies to who investors can learn from. Not everyone has the time to track a Fed statement, a shipping-insurance index and two quarters of regional earnings all at once. Increasingly, they don’t have to do it alone: seeing how more experienced investors are actually positioning their own money, and aligning with it in real time, is becoming a normal part of retail investing rather than a niche feature.
This is also where artificial intelligence is starting to change the everyday experience of investing. Platforms like etoro are increasingly building AI into that experience, not to make decisions for people, but to help them keep up: surfacing what’s actually moving a portfolio, and why, as war headlines, rate speculation and earnings reports compete for attention all at once.
That kind of real-time interpretation used to be the preserve of professional trading desks. Today it’s available to anyone with a retail investing app, and in a market with this many moving parts at once, that access is worth a great deal.
It may be part of why so many UAE investors have managed to stay invested and get more selective at the same time, rather than either freezing or heading for the exits altogether.
The Bigger Signal
These past seven months will be remembered for their headlines: a war, a market that fell further in March than anyone expected, and a rate decision nobody was sure would come.
But behaviours don’t always follow headlines. What our own research shows is steadier: an investor base that kept its nerve through seven months of disruption, responded deliberately rather than defensively, and is ending the quarter leaning toward putting more money in, not less. The next test will arrive before long.
The response we’re seeing here – stay invested, get selective, and use fundamentals rather than headlines as the guide – is a playbook worth carrying into the next quarter.
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