The successful book Start-Up Nation: The Story of Israel’s Economic Miracle (New York, 2009) made the case for why Israel has flourished economically, against all odds. I can’t tell you how many emails and phone calls I have received from people who have read the book and are now all revved up to invest in Israel. The question I hear the most is, “How can I invest in Israel?”
For many investors, investing in local Israeli stocks is one alternative way of gaining exposure to the Israeli economy. If you want exposure to the strong domestic growth you could buy stock in a local food or telecommunications. In order to do so you need to open up a local Israeli brokerage account, invest in Shekels and speak in Hebrew to a local financial advisor. While this may be fine for some investors, for native English speakers this is a big step.
The real growth story in Israel is the ingenuity and creativity exported by Israel. Investors want to be part of all that ingenuity and creativity. Investors want to invest in companies that power the world. It’s no secret that the largest multi-national companies in the world are every active in Israel. Whether it be Google, Johnson and Johnson, IBM or Facebook or any of a multitude of other well know companies, they all come to Israel to acquire or invest in today’s cutting edge technologies. From companies that can put a camera in a pill to help alleviate the need for invasive gastro procedures (Given Imaging), to companies that lead the world in computer security (Checkpoint) to companies that are protecting businesses from cyber-attacks (CyberArk), what Israel does very well is power the world based on technology and that’s what becomes an exciting and attractive investment.
The easiest way to access these companies is via the Israeli stocks that trade in the U.S. Israel has more companies trading on major U.S. exchanges than any other country in the world ex-China. Not all Israeli companies are created equal and investors should do in depth research before investing. As some of these companies are not very large, the smallest piece of news can send their stocks either soaring or tumbling. It is therefore important to speak with your investment adviser to see how, if at all, investing in up-and-coming Israeli companies fits into your overall investment portfolio.