Three ways to invest $10,000 in the next three months

Vijay Valecha, July 2, 2025, The National

Global stock markets have snapped back nicely after US President Donald Trump eased his proposed trade tariffs, while investors have also shrugged off rising Middle East tension. Yet uncertainty remains.

Some investors will be looking to play it safe, while others may be keen to go on the offensive.

If you are looking to invest $10,000 (Dh36,725) over the next quarter, here are three potential strategies.

The first involves investing in the forgotten continent, the second targets a low-risk asset class that may swing back into favour, while the third looks towards two economic powerhouses due for a recovery.

1. European stocks

Investors snubbed Europe for years as they chased the US bull market ever higher. That is now changing.

Vijay Valecha, chief investment officer at Century Financial in Dubai, also favours Europe as monetary policy becomes less restrictive. “Interest rate cuts are making new borrowing less expensive for firms and households, and loan growth is picking up,” he says.

The European Commission has announced a €150 billion ($175.8 billion) funding mechanism to support defence, with total spending potentially reaching €800 billion.

Germany’s €500 billion stimulus package is another long-term boost, he adds.

Mr Valecha says this is driving interest in domestic-focused European stocks, particularly in infrastructure, industrials, energy and defence. “Also, European equities remain relatively inexpensive compared to their US counterparts. This offers an attractive entry point for global investors.”

He suggests exchange-traded funds such as the Select STOXX Europe Aerospace & Defence ETF, which targets sectors powering Europe’s economic transformation.

2. Bonds are back

After years in the doldrums, fixed income is finally catching investors’ attention again.

With interest rate cuts on the horizon and equity markets looking fully priced, bonds offer both income and stability in an uncertain world.

Mr Valecha notes that while the US Federal Reserve held its funds rate at 4.25 per cent to 4.5 per cent in June, a cut in September is a near certainty.

"This would support long-dated US government bonds, or Treasuries, which are more sensitive to rate shifts. ETFs such as the iShares 20+ Year Treasury Bond ETF (TLT) offer exposure to this trade,” he explains.

He also sees promise in US municipal bonds. “State and local governments have maintained solid fiscal health. Elevated yields in municipal bonds provide attractive income opportunities.” He points to the Guggenheim Taxable Municipal Bond & Investment Grade Debt Trust (GBAB), which offers yields as high as 10 per cent.

Mr Valecha says safety seekers should not ignore gold either. “The precious metal is now more than just a safety play, it’s becoming a strategic asset. The price could hit between $3,600 and $3,800 in the medium term and possibly exceed $4,000 if current trends continue.”

Stick to a buy-on-dips strategy. Get exposure to gold through ETFs like SPDR Gold Trust (GLD) or physical gold, he says

3. India and China

These two economic giants have had a rough ride lately, but experts suggest the worst may soon be over.

India’s growth story has been hit by a slowdown in consumer spending, tight liquidity and falling government expenditure, all worsened by fears of US tariffs.

Yet investment managers say valuations have now dropped to more reasonable levels, presenting a fresh entry point for long-term investors who can handle a little volatility.

Source:

The National