I took time out recently to enjoy Dubai with my wife, who is visiting from the UK, and was pleasantly surprised to see just how much is going on.
I had planned to impress her with a week of golf and cricket and the odd Premier League football match at the local sports bar, but I got that one wrong.
Instead, we started with a day at the Dubai Duty Free Tennis Championship, where we saw the eventual winner, Agnieszka Radwanksa, defeat Caroline Wozniaki in a thrilling match. We listened to James Blunt belting it out at the Dubai Jazz Festival and went back later in the week to see James Morrison do much the same thing.
We met up with some long lost friends from Bahrain and visited Atmosphere, the highest cocktail bar in the world, before going to dine at the elegant BICE Mare restaurant with the mesmerising backdrop of the Burj Khalifa fountains.
We saw a very amusing piano-playing double act at the Madinat Theatre and even ventured into an Al Quoz warehouse to listen to an eccentric musician play his triple-strung guitar accompanied, bizarrely, by a harpist and an Arab who played the rabab - an ancient one-string instrument with a haunting sound. An odd combination, but it was spellbinding.
At all of these venues, there were hundreds of people enjoying the entertainment with us. If ever there was a sign that Dubai's economy is bouncing back, this was it. Every event we attended was brimming with customers.
And while I was away from my desk, what was happening in the world's financial markets? Well, it seems they were performing perfectly well without my input, mirroring the signs of economic recovery that I had been witnessing myself in Dubai.
World equity markets continue to impress with a positive start to the year - in fact, the best start to a year since 1991. Investors are increasing their appetite for risk as they shift from cash and low-yielding bonds to equities.
Last year's winners (government bonds) are this year's losers and, conversely, last year's losers (equities in Asia and emerging markets) are this year's winners. So far this year, the MSCI Latin America Index is up 18 per cent and the equivalent indices for equities in emerging markets and Asia Pacific (excluding Japan) are up 16 per cent and 14 per cent respectively.
In a just a few weeks, these performances have nearly wiped out the losses accumulated in 2011. Why, after months of anxiety over euro-zone debt, are investors so positive?
Improving economic data from the US, especially in regard to the creation of new jobs, has been a contributing factor. But the key event has been the decision by the European Central Bank to provide cheap loans to commercial banks in Europe.
Confidence has returned and fear of sovereign default has subsided. As a result, investors are more inclined to buy sovereign debt, as illustrated by the yields on 10-year bonds in Spain and Italy, which have fallen from a catastrophic 7 per cent to a more manageable figure at less than 5 per cent.
This means that these two governments will find it easier to service their debts and thus avoid the default that the world has been dreading for the past nine months.
And what about the UAE's investment scene? When clients wish to invest in this part of the world, I usually suggest they use funds run by a professional manager rather than go direct into equity markets.
It costs a little more, but it gives greater diversity and, importantly, more active management in markets that can be very volatile.
I have been particularly impressed by the range of funds offered by Emirates NBD (ENBD). For the investor who wants to invest in mature equity and bond markets, ENBD offers multi-asset funds with a range of risk profiles.
For a level of risk specified by the investor (active, balanced, conservative), the fund manager seeks to achieve the best risk-adjusted return by controlling the asset mix (cash, bonds, equities) and by making what he believes to be the best choices within each asset class. All these funds have performed well compared with their peers managed by fund managers outside the UAE.
ENBD has also been successful with its range of funds that invest in local equity and bond markets. The MENA High Income fund, for example, invests in high dividend paying stocks of companies listed in the GGC region.
Currently, companies in Saudi Arabia and Qatar with annual dividend yields at about 5 per cent account for 58 per cent of the fund. Since its launch in January 2009, it has returned an impressive 11.7 per cent per annum.
And, during 2011, when equity markets throughout the world were toppling, it lost only 4.8 per cent. For a fund that invests in local markets, it has relatively low volatility and hence has produced an impressive risk-adjusted return (Sharpe ratio is 0.77).
This is a viable option for investors who want to diversify away from mature market equities into emerging market equities, but are concerned about risk.
If equities are too volatile for you, then you might consider the ENBD Fixed Income Fund. This fund invests primarily in private sector and sovereign debt in the GCC countries. About 77 per cent is invested in Qatar and the UAE, with 49 per cent in the energy, financial and real estate sectors.
Since its launch in March 2010, it has returned 9.7 per cent per annum and, during 2011, when the financial world was collapsing, it produced a very comforting 7.6 per cent. Volatility is very low for this level of performance.
Investing in sovereign and corporate debt in oil-rich countries with large current account surpluses is, it seems, a whole league away from the equivalent market in the euro zone.
Bill Davey is a wealth manager at Mondial-Financial Partners in Dubai. Contact him at bill.davey@mondialdubai.com.