7 Things About the Stock Market That Will Impress Your Friends

Here’s the first: The New York stock exchange is the largest in the world, its market capacity is as big as that of the next four runners-up combined together.

That didn’t impress anybody? Right, it’s probably well known and why should your friends care, anyway.

So here’s another interesting fact, maybe this will get their attention: Foreign owned companies are basically banned from trading on the Chinese stock market. Even though authorities had announced already in 2011 that they are basically ready to open the stock exchange to foreign companies, it hasn’t actually happened. This month one firm finally managed to break through the Chinese wall: WLCSP, Part of The Infinity Group has a foreign co-owner and is based on foreign technology. The non-Chinese part of it is Israeli.

Where to Invest

What’s really impressive though, is that this characterizes Israeli companies and entrepreneurship. They are always where it’s happening and often pave the way. There is no stopping Israeli Start-ups. If you are looking for a high return investment, all you have to do is pinpoint the next Israeli company to make it big on a foreign stock market. Now, that would really impress your friends.

But let’s get a little more serious and take a look at Israeli companies and some impressive numbers and figure out how this can be relevant for you (and your friends).

1.     There are 73 Israeli companies already trading on NASDAQ today. This number is topped only by China with close to 120 companies. Considering the size of the country that says something about Israeli economy.

2.     Four Israeli companies went public in 2013 on NASDAQ with an average increase of 85%.

3.     In 2014 there have been six Initial Public Offerings by Israeli companies on NASDAQ till early September.

4.     One of the companies to go public recently was Mobileye (MBLY), on July 31^st. Despite the security crises in the Middle East at the time, it has gone up by more than 70% in little more than a month. This was the biggest rally globally during this time.

5.     A similar success could be reported during the same period by Caesarstone (CSTE). Their stocks climbed 20% in August, making it the 2^nd best performance on the Bloomberg Israel-U.S. Equity Index. Since 2012 the company tripled its growth.

6.     The most striking, though is the success of the most recent IPO by ReWalk (RWLK) only two weeks ago. The price surged a stunning 220% within its first week at NASDAQ.

7.     NASDAQ is not the only stock exchange market outside of Israel, where Israeli companies trade their shares. At the LSE (London Stock Exchange) there have been five IPOs by Israeli companies this year, compared to only one last year. The most recent was Matomy Media Group in July.

Be Part of the Party

If you don’t know where to invest, these success stories give you a direction to look in. Here is an economy which promises to keep bringing forth amazing technology developments in healthcare, communication, security and other fields. You can be part of this on your local stock market in the US or elsewhere.

However, to make your investment even more effective consider taking it directly to Israel. You can open an Israeli investment account directly at a bank or with an Israeli broker. They can be managed in English via phone or on-line, which makes things as comfortable as if it was in your hometown. If you are in the US, your IRA (Investment Retirement Account) can be used to open a foreign brokerage account. This is a further advantage, because it will keep tax burden on capital gains low.

How to Choose

Most companies initially offer their shares at the Tel Aviv stock exchange, before they are ready to face the world of Wall Street wolves. That gives you a chance to catch them while they are still small and stock prices are low. It also involves, however, a high risk and is not for everyone.

Rather than betting on random horses, you can choose an ETF (Exchange Traded Fund) that invests exclusively in Israeli stocks. Again, you may want to do so directly in Israel, in order to save high management fees charged in the US and gain their full advantage.

For those who want to further lower the risk, you can join 50% of the U.S. states and invest in Israel Government Bonds. These are stable and provide a steady stream of income. And if you purchase directly in Israel you will benefit from a higher interest rate.