How to buy Israeli stocks from outside of Israel

On a sunny day in October 2023, Israel was brutally attacked. Palestinian Muslim extremists killed 1200 innocent Israeli citizens and took 240 people hostage. This forced Israel into a war. However, its economic indicators were much stronger than in previous wars, with a low debt-to-GDP ratio of around 60% (compared to 123% in the US) and an all-time high in foreign exchange reserves of $200 billion.

Despite Israel’s self-defensive wars against Hamas in Gaza and Hezbollah in the north, major blue-chip companies like Intel have committed to a $25 billion investment in Israel. This capitalizes on Israel’s ecosystem of engineers and developers, thereby enhancing Intel’s research, development, and overall competitiveness.

Advocacy groups supporting Israel worldwide have confronted the surge of coordinated anti-Israel protests. As attacks on Israeli and Jewish students increase on campuses and city centers across Europe and the US, supporters of Israel’s right to not only exist but also prosper should unite. It’s vital to support Israeli businesses and Israeli-founded companies that trade overseas.

As advocates for Israel, we surely can’t just sit comfortably in the West while Israeli businesses operating worldwide face coordinated attacks from well-funded organizations like BDS (Boycott, Divestment, Sanction) of Israel groups and the Palestinian Solidarity Campaign, can we?

It’s time to support Israeli innovation and commerce that has benefited consumers and various industries. As supporters of Israel, we recognize we are outnumbered. When Israel defends itself, numerous voices rise in protest, demanding “Free Palestine!”, “End the Occupation”, or “From the River to the Sea, Palestine will be Free!” Our strength lies in unity. Let’s unite and defend Israel, not only politically but also economically, by trading with and possibly investing in Israeli companies.

Israel is renowned as the “start-up nation,” and more accurately, the “scale-up nation,” due to its distinctive ecosystem that consistently yields rapidly-growing technology-based businesses. These quickly expanding and well-structured companies draw the attention of venture capitalists and family offices, who eagerly invest in pitches from entrepreneurs.

However, early-stage start-up investing is often considered too high risk for everyday investors, unless you have significant capital and experience as an angel investor who can thoroughly analyse the fundamental performance metrics of small and medium-sized businesses. It’s important to take the time to read the disclaimers on some of the Israeli crowdfunding platforms that caution about the risks of investing in start-ups and SMEs.

Investing in Israeli-founded companies offers a means to diversify your portfolio and access Israel’s vibrant, innovative economy. This comprehensive guide, though not providing investment advice, will show you how to do so, no matter where you are in the world. Below are some essential steps to consider in your process.

1. Define Your Investment Goals

Purpose: Are you investing for growth, income, or preservation of capital? 

Time Horizon: How long do you plan to hold your investments?

2. Conduct Research

Market Analysis: Understand the current state of the market and general economic indicators.

Industry Analysis: Identify industries with potential for growth. For example, an Israeli company operating in the shipping tech industry differs from a cybersecurity company.

Company Analysis: Dive deep into potential companies to invest in. Consider their financial health, management team, competitive advantage, and future growth prospects.

Israeli-based stock analysis company, Tipranks, uses AI to help both non-professional and professional investors make smarter, data-driven investment decisions via a simple dashboard.

3. Choose the Right Brokerage: Now that you’ve decided which stocks you want to buy, you’ll need a brokerage account with access to international markets. If you want to purchase stocks in Israeli founded companies listed on the international markets, choose brokers that offer low fees, reliable customer service, and sturdy trading platforms. Some well-known international brokers include Hargreaves Lansdowne, Interactive Brokers, Etoro, and Charles Schwab. If you would like to purchase stocks in Israeli companies listed on the Tel Aviv Stock Exchange directly, Interactive Broker are considered a excellent platform.

To register for an account, you’ll need to provide personal details, your investment experience, and financial information. You might also need to submit identification documents for verification.

4. Making Your First Trade: Once you have selected your stocks and have opened a brokerage platform to place trades. You can buy stocks outright.

5. Monitoring Your Investments: Regularly monitor your investments. Keep an eye on company news, the industry the company you choose to operate in, and the global economic factors that might impact your holdings.

6. Managing Your Portfolio: Adjust your portfolio as needed based on performance, changing goals, or shifts in the market environment. Diversification is key to managing risk.

7. Selling and Withdrawing Funds: When ready to sell, execute trades through your brokerage. Understand and plan for any capital gains tax you may owe. Consider any potential fees or currency conversion rates.

8. Seeking Professional Advice: Consider seeking personalized advice from a financial advisor, especially if you are new to international investing. Tipranks provides services such as expert insights, breaking news and stock analysis, data-driven decision-making, real-time portfolio analysis, and access to hidden investment opportunities.

9. Staying Informed: Stay updated on Israeli market trends and global economic news. Websites such as timesofisrael.com and isranomics.com are great resources. You can also sign up for the Open Invest Israel weekly newsletter.

Investing in Israeli stocks is not only a patriotic act, but also a show of faith in Israeli businesses that compete globally, which can be a valuable addition to your portfolio. This requires careful research, an understanding of international trading, and ongoing portfolio management. With the right approach, you can successfully invest in companies emerging from the most innovative nations in the world.

However, it’s important to remember that investment carries risks. Therefore, it’s advisable to seek personalized advice from financial professionals.

This article is purely informative and does not constitute investment advice or guidance. It aims to assist Israel-supporters worldwide in making their own decisions about investing in Israeli companies.

The Israel Stock List Ebook updated for 2024 is now available for only $15. This simple eBook provides a comprehensive list of all the Israeli-founded companies that can be purchased on the international markets.

The Israel Stock Tracker contains all of the Israeli-founded companies listed on the New York Stock Exchange, NASDAQ, and London Stock Exchange. The spreadsheet allows you to track the share price of those Israeli-founded companies.

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Writer - Jon Simmons - Bi-lateral trade investment advocate for Israel and its supporters, and content strategist for ambitious businesses looking to grow online.