Markets are driven by more than just numbers and charts. They are shaped by human behavior, and emotions often sit at the core of every decision. In the UAE, where retail participation in markets has grown significantly, our latest eToro survey shows just how powerful emotions can be in shaping investor choices.
Emotion at the core of investing A clear 61% of investors admit that emotions always or often influence their decisions. Over the past six months, the feelings that they have experienced while investing have been overwhelmingly positive: hope (55%), excitement (53%) and confidence (50%). Yet, investors are not always at ease, with 36% having experienced anxiety and 14% regret.
UAE investors stay on top of market shifts Emirati investors are highly self-aware about these emotions. A whopping 86% believe controlling emotions is essential to being a successful investor, and over half (53%) believe it is the most important element to being successful.
This awareness is perhaps why many have reacted to market uncertainty with agility rather than being paralysed by it.Nearly half (46%) have already adjusted their portfolios in response to global trade tensions, while another 44% plan to do so. Those adjusting demonstrate a range of strategies: 53% are increasing exposure to local equities, 51% to commodities, 40% to multinationals less exposed to trade disputes, and 35% to global equities outside affected regions.
Sticking to the strategyOne of the hardest tests of an investor’s emotions is when their portfolio drops significantly in value. Luckily, UAE investors remain measured. In such situations, 45% consult an advisor, 41% shift to safer assets, 36% buy more to average down, 29% stay put and wait for markets to recover, while just 27% sell holdings.
Our survey also explored the effects of social influence. 34% of respondents say they often feel compelled to invest when others are doing well, while 50% also admit they feel this sometimes. This doesn’t mean they blindly chase trends and copy those around them – indeed the most popular sources of financial advice for UAE investors are professional advisors (60%), online investment platforms (50%) and news outlets or financial websites (41%), rather than family and friends (37%) or influencers (34%). But it shows how seeing peers succeed can create a positive feedback loop that motivates individuals to take part in the markets.
Emotions will always be part of investing. But what this survey highlights is that UAE investors are not only aware of their emotions; they are able to manage them. If they’re right about controlling emotions being an important ingredient for success in the markets, then they’re on the right track.
