Lechatan Bekavod The full guide

Everything worth knowing before you start investing

A plain-language guide, from the basics to your first purchase. Read it in order, or jump straight to the chapter you need.

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Guide chapters
INTRODUCTION

Why I founded Lechatan Bekavod

About 15 years ago I attended a lecture on financial education. The lecturer presented what he called "the eighth wonder of the world": compounding. He explained how money invested over time, where the gains themselves keep earning gains, can grow significantly over the years.

Read the rest of the story

The idea intrigued me. Later, mainly during my undergraduate studies at the Technion, I went deeper into economics, finance and the capital markets. The more I learned, the more I understood that this is an option worth knowing about: long-term investing, done thoughtfully and with diversification, does not have to be reserved for experts or the wealthy.

And yet I found that many people barely know about this option. Some are afraid of the stock market, some see it as a complicated world full of unfamiliar terms, and some simply don't know where to start. Often it is exactly this lack of knowledge and access that makes people give up in advance on learning about investment options that might suit them.

Today, more than ever, technology and digital tools have made access to the capital markets simpler and more convenient. But technical access alone is not enough. It is important to understand what you are doing, what the risks are, what options exist and what to check before making a decision.

That is why I founded Lechatan Bekavod. My goal is to make knowledge and tools accessible, to explain the world of investing in simple, clear language, and to show that it can be learned step by step, even without being a market expert.

I believe that when it comes to major financial goals in life, such as our children's weddings and helping them set up their homes, it is worth learning about the options as early as possible rather than waiting until the last minute. There are no promises here of getting rich or of guaranteed returns, only a wish to give you knowledge, tools and a better starting point for planning the future.

I invite you to read, learn, ask questions and get to know a world that may have seemed distant and complicated until now. You may discover it is far more accessible than you thought.

I want to stress: investing in the capital markets involves risk, and you can lose money. This site is for educational purposes only. I am not an investment adviser, and every investment decision should be made after learning and examining your personal situation and needs.

Long-term investing, done thoughtfully and with diversification, does not have to be reserved for experts or the wealthy.
A.L.Founder, Lechatan Bekavod
THE IDEA

Three principles that guide us

OUR GOAL: To encourage families to take their financial future into their own hands: learn the principles, understand the risks and choose wisely, only through regulated institutions, and steering clear of dubious products and promises of quick profit.

Simplicity

We explain in plain language, define each term the first time it appears, and avoid complicated products.

Transparency about risk

Investing in the capital markets carries a risk of loss. We show it openly, alongside the costs and the site's commercial relationship.

Your own choice

There is no personal recommendation here. The goal is to give you tools to understand the options and decide for yourself.

WHAT IS THE CAPITAL MARKET

What is the capital market, and why do families consider investing in it?

When you save for your children's weddings or another goal many years away, an important question comes up: where should the money be kept until you need it? You can keep it in a bank account, choose a savings product, or consider investing in the capital market. Each option has advantages, drawbacks and a different level of risk.

The capital market is a system in which companies, governments and investors raise money, buy and sell financial assets called securities. The stock exchange is one of the places where this trading happens.

  1. A company raises moneyfor its operations, development and growth
  2. Trading happens in the capital marketinvestors buy and sell securities
  3. Investors take part in the investmentthey may benefit from rising value or income, but may also lose

A share (stock)

A small piece of ownership in a company. If the company does well and its value rises, the share price may rise, and some companies also pay shareholders part of their profits (a dividend). On the other hand, the share price can also fall, and you can lose money.

A bond

A way for a company or government to borrow money from investors, committing to pay them and repay the principal under set terms. Bonds carry risk too, for example if the issuer fails to meet its obligations or the bond's price falls.

Why consider investing in the capital market at all?

1

The chance to grow your money over time

Learn more

When you invest in companies, you take part in their economic activity and growth. If they succeed, it may show up as a rise in the value of your investment and in distributed profits.

Throughout history, major stock markets have gone through sharp declines and crises, but in many cases they recovered over time and even reached higher levels than before the declines. That's why long-term investing can matter, and why it's important to give it time without rushing to sell after temporary declines. So invest only money you won't need soon, and whose volatility and risk you can bear.

2

Preserving your money's purchasing power

Learn more

Over the years prices tend to rise, which is called inflation. Money that doesn't earn a return that keeps up with rising prices buys less and less over time.

So when planning a goal many years away, think not only about how much you'll save, but also about how to manage it over the period.

Does this mean you have to invest in the capital market?

Not at all. The capital market doesn't suit every person or every goal. Investments can lose value, sometimes significantly, and there's no promise the money will grow or recover by the time you need it. So money for everyday expenses, emergencies or a near-term goal needs different treatment from spare money for the long term.

Next, we'll look at one way to invest in the capital market: funds that track indices, which let you spread your investment across many companies and assets instead of choosing just one.

WHY START EARLY

When you have a big goal ahead, time can be on your side.

Children's weddings, helping a young couple get started and other large family expenses are goals you can prepare for in advance. Saving early lets you build a habit and deposit amounts that fit your budget over time, instead of trying to find a large sum at the last minute. Investing in the capital markets may help build wealth, but it involves volatility and the possibility of loss.

1

Start in time

More years until the goal means more time to plan, adjust and correct along the way.

2

Stick to an affordable amount

There is no single monthly amount that suits everyone. What matters is that it fits your budget and that you can keep it up over time.

3

Plan carefully

Don't invest money you will need soon, or money needed for everyday expenses or your emergency fund.

COMPOUND GROWTH

How might small deposits add up over time?

Compounding in the capital markets is essentially a cumulative growth effect. The gains an investment earns stay invested, so they too may generate further gains over time. That way money can grow not only from the original amount, but also from the gains accumulated along the way.

Important: this is not guaranteed interest, interest on a loan, or interest paid to anyone. It is an effect that occurs when investment gains remain invested. In the same way, declines in the value of the investment affect the whole amount too.

A simple example: how gains start earning gains of their own

Suppose you invest ₪1,000 once, leave it alone, and it grows by 10% every year. This is a hypothetical assumption only: in reality returns change from year to year.

  • Year 1: 10% of ₪1,000 is ₪100. At the end of the year you have ₪1,100.
  • Year 2: this time the 10% is calculated on ₪1,100, so the gain is ₪110, not ₪100. You have ₪1,210.
  • Year 3: 10% of ₪1,210 is ₪121. You have ₪1,331.

Notice: you didn't add a single shekel, yet the yearly gain kept growing. That's because the gains from earlier years stayed invested, and now they are "working" too.

₪1,000 at a constant hypothetical 10% a year
AfterGain that yearValue
Year 1₪100₪1,100
Year 10₪236₪2,594
Year 20₪612₪6,727
Year 30₪1,586₪17,449

Without this effect, that is, earning 10% each year only on the original ₪1,000, you would have ₪4,000 after 30 years. The difference up to ₪17,449 is entirely gains on gains.

Why 10%? The S&P 500, an index of about 500 of the largest US companies, has returned roughly 10% a year on average over almost a century, including dividends and before inflation, tax and fees. That average includes very hard years: in 2008, for example, the index fell about 37%.

This illustrates past returns. It is not a forecast or a promise. Investments can also lose money, and actual results may be much lower. You can test scenarios yourself in the calculator below. Source for the historical figure: annual S&P 500 return data since 1928 published by Prof. Aswath Damodaran of NYU.

The default, 10%, is close to the historical annual average of the S&P 500 and is used for illustration only. All scenarios are test assumptions, not forecasts. At 0% you see your total deposits only, and you can also enter a negative return.

Total deposits over the period
Hypothetical value at the end
Gap between value and deposits
Chart comparing total deposits with the hypothetical value over the years
Total deposits Hypothetical value under the assumption

Note: This is an illustration only, based on a constant return assumption you chose. In reality returns are not constant, there may be years of declines, and the result may be lower than the amount deposited. It is not a forecast or a recommendation. That said, history shows that in every 20-year period since 1928, an investment in the S&P 500 (including dividends) ended with a nominal gain. That is why this guide focuses on long-term investing only.

How is this calculated?
  • The starting amount is deposited on day one.
  • The monthly deposit is added at the end of each month, with the same timing throughout.
  • The annual return you chose is converted to an equivalent monthly return and applied to the balance each month.
  • The "gap" is the difference between the hypothetical value and total deposits. With a negative return it is negative.
  • The values you enter stay in your browser and are not sent anywhere.
HOW PASSIVE INVESTING WORKS

Instead of trying to pick the winning stock, you can invest through a broad index.

  1. A shareas we saw, is a small piece of ownership in a company.
  2. An indexis a list of companies selected according to defined rules.
  3. An index fundtries to track the performance of a given index by holding assets or using other tracking methods. When you hold a unit in the fund, your exposure is to the assets in the fund's portfolio, according to its policy.

Not every fund necessarily holds every share in the index, and changes to the list of companies depend on the index rules and the fund's tracking method.

Diversification

Don't depend on a single company.

Learn more

A broad index may include many companies, from different sectors and sometimes different countries, so one company's troubles have less impact on the portfolio. Keep in mind: diversification does not prevent declines in the market as a whole.

Costs

Check how much you pay over time.

Learn more

Costs are usually charged even in years when the investment fell, and they add up over the years. Worth checking:

  • The fund's management fee.
  • Trading, buying and selling commissions.
  • Currency conversion costs.
  • The spread between buy and sell prices.
  • Other costs depending on the product and account, such as account or custody fees.

Simplicity

You don't have to trade every day.

Learn more

The passive approach aims to reduce attempts to time the market and frequent trading. It still requires understanding what you buy and reviewing the plan periodically.

Consistency

Set a plan and avoid impulsive reactions.

Learn more

Review the plan when your goals or financial situation change, not because of every news headline. Decisions made in panic during declines, or in excitement during rallies, can hurt the result.

RISK AND SUITABILITY

Before investing, know when you might need the money.

Stocks can fall sharply, even in a broad index. There is no guarantee the market will recover by the time your family needs the money. So distinguish between money for everyday expenses and emergencies, money for near-term goals, and money you might consider investing for the long term.

NOT FOR STOCKS

Everyday expenses and emergency fund

Keep it somewhere liquid and stable that fits your needs. Investing in stocks is no substitute for an emergency fund.

CAUTION

Money needed in the next few years

A volatile investment may force you to sell at a loss, at exactly the wrong time.

WORTH LEARNING ABOUT

Long-term money

You can learn about investment options, but match the level of risk to your goals, time horizon and ability to bear losses.

Example: why a decline hurts more than it seems

If a ₪100,000 portfolio falls 30%, it is worth ₪70,000. To get back to ₪100,000 it needs to rise about 42.9%. This is a mathematical illustration only, not a forecast or a claim about any particular event.

₪100,000 ₪70,000 ₪100,000 Before 30% decline 42.9% rise

A fall in the value of an investment is an unrealized loss: your money is worth less, but as long as you haven't sold, the loss is not final and may change with the market. Selling during a decline can lock in the loss and miss a future rise, if there is one. On the other hand, continuing to hold does not guarantee a recovery either.

Historically, broad stock indices in major markets have recovered from sharp crises and even reached new highs, though sometimes it took many years. That's why long-term investors look at their investment over a horizon of years, not by short-term swings. Past performance does not guarantee similar results in the future.

Avoid frequent trading and decisions made in panic, and review your plan from time to time and as your goals and personal situation change.

Safety checklist: when to walk away

  • Someone promises you a return, or a high return "with no risk".
  • You are being pressured to decide quickly.
  • You are asked to transfer money to a private account or an unregulated entity.
  • You are offered a product you don't understand.
Learn more: how to check a financial institution

Before transferring money, check who you are dealing with and who regulates them. The Israel Securities Authority lets you check license holders and regulated entities, and the Capital Market, Insurance and Savings Authority has information on provident funds and insurance companies.

Be especially wary of "investment groups" on social media, leveraged forex trading presented as a way to save, and anyone calling themselves an expert without stating a license. Regulation does not remove market risk and does not guarantee returns.

Israel Securities Authority website

STEP-BY-STEP GUIDE

Seven steps, from setting a goal to your first purchase

Open an account, deposit money, choose a fund and buy. Each step has a short explanation and a checklist, and you can go through them at your own pace.

  1. STEP 1Set a goal and a time horizon

    What do you want to fund, in how many years will you need the money, and how much can you deposit each month without hurting everyday expenses and your emergency fund?

    • I wrote down a clear goal and roughly when I'll need the money.
    • I have a separate emergency fund.
    • I chose a monthly amount that doesn't hurt everyday expenses.
    What not to do

    Don't take a loan in order to invest, and don't deposit money needed for living costs or upcoming expenses.

  2. STEP 2Choose a way to invest and check the institution

    There are several ways to invest for the long term, and none suits everyone. This guide focuses on the first: a self-directed investment account.

    Self-directed trading accountAn investment account at a bank or brokerage, where you decide what to buy and when. Responsibility for choosing and monitoring is yours.
    Investment provident fund (kupat gemel lehashkaa)A savings product run by a management company. You choose an investment track, and the company carries out the investing.
    Other productsSuch as mutual funds or savings policies, as needed and subject to each product's terms.
    • Who is the institution, and who regulates it? Where are the assets held?
    • What fees apply, and is there a minimum deposit?
    • How is currency converted, and what are the terms of service?
    How do these options differ?
    • Self-directed trading account: you choose what to buy and when. The money is accessible on any trading day, you pay fees per the fee schedule, and capital gains tax is paid when you sell at a profit.
    • Investment provident fund: a management company invests according to a track you choose. There is an annual deposit cap, you can withdraw at any time by paying tax on the gain, and withdrawing as an annuity from age 60 offers a tax advantage.
    • Other products: each has its own terms, costs and tax rules, so read its documents before joining.

    Whatever the route, regulation does not remove market risk and does not guarantee returns.

  3. STEP 3Open an investment account

    The process takes place on the financial institution's website: reading the terms, filling in details, identification and documents as the company requires, and receiving approval. How long it takes and whether the account is approved depend on the company.

    Go to the Excellence offer

    The account is opened on the company's website, and the company is responsible for the process and terms.

  4. STEP 4Deposit money into the account

    Once the account is approved, transfer money from your bank account to the investment account, using the transfer details the brokerage provides. The money shows up as an available balance and is not yet invested in anything.

    • Transfer only from a bank account in your own name.
    • Check whether there is a minimum deposit.
    • Make sure the money arrived and appears in your available balance.
    Shekels or dollars? And monthly deposits

    Currency: a fund traded on the Tel Aviv Stock Exchange is bought in shekels. A fund traded abroad is usually bought in dollars, so you'll need to convert shekels to dollars in the account. Conversion has a cost, so check it in the fee schedule.

    Regular deposits: you can deposit once, or set up a fixed monthly transfer from your bank account. Even after depositing, the money is invested only when you place a purchase, or if you set up an automatic purchase plan in advance, if the brokerage offers one.

  5. STEP 5How do you choose a fund that tracks an index?

    Once you understand which index you want to learn about, you also need to understand the fund that tracks it. Two funds can track the same index but differ in tracking method, how they handle dividends, where they are domiciled and their costs. So don't look only at the fund's name or its management fee.

    • Which index does the fund track?
    • How does the fund get exposure to the index: holding the securities themselves, or using derivatives?
    • Are dividends accumulated in the fund or paid out to investors?
    • Where is the fund domiciled, and what might that mean for tax?
    • What is the total cost, including fund fees, trading costs, spread and broker commissions?

    This information is educational only. It does not rank funds and is not a recommendation to buy any particular security.

    What's the difference between the S&P 500 and a world index?

    An index is not a fund. An index is a way to measure the performance of a group of securities according to defined rules. For example, the S&P 500 follows shares of large US companies. A world index, by contrast, includes companies from different countries and markets. You can't buy the index itself; you can buy an investment product that tries to track it.

    Not every fund that tracks the same index is built the same way. Funds tracking the same index may differ in how they track it, in costs, in where the fund is domiciled, and in whether dividend income stays in the fund or is passed to investors. That's why it's important to read the fund's documents and not rely on the ticker alone.

    What's the difference between physical and synthetic replication?

    Physical replication: the fund usually buys the securities in the index, or a representative sample of them, aiming to get close to the index's performance. "Physical" doesn't guarantee the fund holds every single security in the index; some funds use sampling.

    Synthetic replication: a synthetic fund may hold a different basket of securities and use a swap agreement with a counterparty, designed to deliver the index return to the fund. The structure may help track the index, but it is more complex and also carries counterparty risk. This doesn't mean the method is necessarily better or worse; you need to understand the structure and read the fund's documents.

    What's the difference between an accumulating and a distributing fund?

    In an accumulating fund, dividends received stay inside the fund and are reinvested according to its policy. In a distributing fund, dividends are paid to investors in cash according to the distribution policy. Accumulating doesn't mean there are no tax implications, and distributing doesn't guarantee a fixed amount or frequency.

    The trading currency isn't necessarily the currency exposure. The same fund can trade on different exchanges in different currencies. Buying a unit in shekels, euros or dollars doesn't mean exposure to the currencies of the underlying assets disappears. Only if the fund is defined as currency-hedged, and subject to its hedging policy, is there an attempt to reduce certain currency exposure.

    Examples of existing funds and data comparison

    These examples were chosen to illustrate differences between index types and fund structures. They are not a recommended list and are not ranked. They are ordered by category, not by preference. The data was checked on November 1, 2026 and may change; check the fund's current documents before taking any action. The ISIN identifies the fund; tickers and local security numbers depend on the exchange and listing currency.

    US citizens: funds domiciled outside the US (like the Irish funds here) may be problematic for you tax-wise. Details.

    S&P 500 exposure

    iShares Core S&P 500 UCITS ETF
    Index
    S&P 500
    Annual management fee
    0.07%
    Tracking method
    Physical
    Dividends
    Accumulating
    More details
    TASE security no.
    1159250
    ISIN
    IE00B5BMR087
    Ticker
    CSPX (on some exchanges)
    Domicile
    Ireland
    Trading
    Including Tel Aviv in shekels and London in dollars
    Issuer and source
    BlackRock iShares · checked 1.11.2026
    Vanguard S&P 500 ETF
    Index
    S&P 500
    Annual management fee
    0.03%
    Tracking method
    Check the current document
    Dividends
    Distributing
    More details
    Ticker
    VOO (United States)
    Domicile
    United States
    Note
    Low fees, with a legal structure and distribution policy different from an Irish UCITS fund. Fees alone don't determine which fund suits an Israeli investor.
    Issuer and source
    Vanguard · prospectus 28.04.2026
    Invesco S&P 500 UCITS ETF Acc Synthetic
    Index
    S&P 500
    Annual management fee
    0.05%
    Tracking method
    Synthetic (swaps)
    Dividends
    Accumulating

    The management fee isn't the whole picture: the issuer's page also lists a swap fee of 0.072%, and the KID estimates transaction costs of about 0.07% a year. These are separate fields and should not be added into one cost. This structure also carries counterparty risk.

    More details
    ISIN
    IE00B3YCGJ38
    Ticker
    SPXS (London)
    Unit currency
    US dollar
    Structure
    Holds a basket of shares and uses unfunded swaps with approved counterparties, according to Invesco
    Issuer and source
    Invesco · data as of 07.10.2026

    Global stock market exposure

    Vanguard Total World Stock ETF
    Index
    FTSE Global All Cap
    Annual management fee
    0.06%
    Tracking method
    Passive, by sampling
    Dividends
    Check the current document
    More details
    Ticker
    VT
    Domicile
    United States
    Scope
    About 10,185 holdings in more than 47 countries (30.09.2026), including emerging markets and small companies
    Note
    This is not the same exposure as the S&P 500
    Issuer and source
    Vanguard · fee from 27.02.2026
    iShares MSCI ACWI UCITS ETF
    Index
    MSCI ACWI
    Annual management fee
    0.20%
    Tracking method
    Physical, optimised
    Dividends
    Accumulating
    More details
    TASE security no.
    1159235
    ISIN
    IE00B6R52259
    Ticker
    SSAC (London)
    Domicile
    Ireland
    Scope
    About 1,655 holdings, large and mid-size companies in developed and emerging markets (September 2026)
    Note
    Not the same as VT: the index and number of companies differ
    Issuer and source
    BlackRock iShares · September-October 2026

    A different asset type: a bond fund

    Vanguard Total Bond Market ETF

    A bond fund is a different asset type from a stock fund, not an alternative to it. It appears here only to illustrate the difference, not for comparison with the funds above.

    Underlying assets
    Broad US bond market
    Annual management fee
    0.03%
    Ticker · domicile
    BND · United States

    Note: The content on this site does not constitute investment advice, investment marketing, or a substitute for personal advice that takes into account each person's particular data and needs. The author does not hold a license under the Israeli Regulation of Investment Advice, Investment Marketing and Portfolio Management Law, 5755-1995. Anyone acting in reliance on the content does so at their own risk. Fund, cost and tax data may change; before any action, read the current official documents.

    What other costs should you consider?

    To understand how much it costs to hold a fund, don't look only at the management fee. Management fees are charged from the fund's assets, but there may also be transaction costs inside the fund, a spread between the buy and sell price, brokerage commissions, currency conversion costs and taxes. So check the fund's documents and the broker's fee schedule, and consider the total cost relative to how you plan to invest.

    • Fund management fees and operating costs: charged from the fund's assets and reflected in its value.
    • Transaction costs inside the fund: costs of buying and selling assets. They may vary and aren't always included in the management fee.
    • Trading spread: the gap between the buy and sell price on the exchange.
    • Broker fees: buy and sell commissions, minimum commission, currency conversion, account or custody fees, per the fee schedule.
    • Tax: may be affected by the fund's domicile, the type of income, your tax residency and the law at the time.

    A simple example: if the average value of the investment over a year is ₪10,000, a 0.03% management fee is about ₪3 a year; 0.05% is about ₪5; 0.07% is about ₪7; and 0.20% is about ₪20. This illustrates the stated management fee only, without transaction costs, spreads, commissions, currency conversion or tax. On small trades, a minimum commission and currency conversion may matter more than a few shekels' difference in management fees.

  6. STEP 6Buy the fund you chose

    Purchases are made from within the investment account, on a screen usually called "Buy" or "New order". This is roughly how it works at any brokerage:

    1. Search for the fundby its local security number (in Tel Aviv) or its ISIN, not just by name, so you don't confuse similar funds. Examples of well-known portfolios and securities
    2. Make sure it's exactly the right fundCheck the full name, the exchange and the trading currency.
    3. Decide how much to buyBy number of units or by amount. Unit price times quantity is the amount deducted from your balance, plus commission.
    4. Choose an order typeWith a limit order you set the maximum price you're willing to pay, and the order executes only at that price or lower.
    5. Check the commission and confirmBefore confirming, a summary of the amount and commission usually appears.
    6. Make sure the order was executedThe fund appears in your account's holdings. If the exchange is closed, the order waits for trading to open.
    What's the difference between a limit order and a market order?

    With a market order the purchase executes immediately at the price available at that moment, which may differ from the price you saw. With a limit order you set the price, and if there's no seller at that price, the order simply won't execute until it's cancelled or the price matches. This gives you more control over the price.

    Order names and options vary from one brokerage to another. If anything is unclear, you can contact the brokerage's customer service before confirming.

  7. STEP 7Build a habit and check in from time to time

    After your first purchase, get to know the product and the fees, decide for yourself on a pace of deposits and purchases that suits you, and review the plan at set times or when your goals or finances change.

    • I set a fixed date to review my plan, for example once a year.
    • I know which fees I pay.
    Do regular deposits guarantee a profit?

    No. Regular deposits and consistency help build a habit and avoid rash decisions, but they don't guarantee a profit.

Understood the principles and want to look into opening an account? Go to the Excellence offer terms and read them before opening.

To the offer terms
PORTFOLIO EXAMPLES

Three well-known approaches to building a passive portfolio

Three of the most common approaches worldwide, based on principles of well-known investors and researchers. Each shows its usual allocation, and next to each component an example of a security traded on the Tel Aviv Stock Exchange, in shekels, that tracks it. The security shown is one example among several that track the same component, not a selection or a recommendation. Other securities with similar features may exist.

1. The "Three-Fund" portfolioBroad global diversification with minimal effort

One of the most popular approaches, associated with the "Bogleheads" community and the principles of John Bogle, founder of Vanguard. The portfolio has only three components. The split between them depends on age, goal and ability to bear risk, and no single split suits everyone.

US stocks
Invesco S&P 500 UCITS ETFSecurity no.: 1183441Management fee: 0.05% at the time of writing. Fees may change, so check them yourself in the fund's current documents.An Irish synthetic, accumulating fund. The synthetic structure may avoid US withholding tax on dividends.
Stocks outside the US
For example: a fund on a European index, such as Invesco MSCI Europe UCITS ETFYou can also add emerging markets. If you prefer simplicity, a broad world index can be used instead, as in portfolio 3.
Bonds
MTF Israeli Government Bonds General index fundSecurity no.: 5122999Tracks an Israeli government bond index and serves as a relatively stable shekel component, without foreign-currency exposure.
2. The "All Weather" portfolioA mix of assets meant to cope with different economic conditions

The portfolio associated with Ray Dalio, in the simplified version published to the public. The aim is to combine assets that behave differently in growth, recession and inflation, to reduce volatility. That doesn't mean it never falls: it too has lost money in hard years, for example when stocks and bonds fell together.

30%US stocks
Invesco S&P 500 UCITS ETFSecurity no.: 1183441Management fee: 0.05% at the time of writing. Fees may change, so check them yourself in the fund's current documents.
40%Long-term government bonds
KESEM KTF Israeli Government Shekel Bonds 10+ YearsSecurity no.: 1150531Long-term government bonds, which often behave differently from stocks during crises.
15%Intermediate government bonds
MTF Israeli Government Shekel Bonds 2-5 YearsSecurity no.: 5122940
15%Gold and commodities
KESEM KTF GoldSecurity no.: 1157973Tracks the price of gold, with no need for physical storage. In the original version this component is split into 7.5% gold and 7.5% commodities.
3. A global stock portfolio in one securityThe simplest way to spread across the whole world

A modern, simple approach: one security that holds companies from around the world, with no need to rebalance between components.

100%Global stocks
iShares MSCI ACWI UCITS ETFSecurity no.: 1159235Management fee: 0.20% at the time of writing. Fees may change, so check them yourself in the fund's current documents.An Irish physical, accumulating fund that spreads global exposure automatically and precisely by market value: about 60% US, the rest the rest of the world. Dividends are reinvested inside the fund, with no purchase commission on your side. In Irish funds, withholding tax on US dividends is usually 15% instead of 25%.

This is a stocks-only portfolio, with no bonds, so its volatility is higher.

Note: The content on this site does not constitute investment advice, investment marketing, or a substitute for personal advice that takes into account each person's particular data and needs. The author does not hold a license under the Israeli Regulation of Investment Advice, Investment Marketing and Portfolio Management Law, 5755-1995. Anyone acting in reliance on the content does so at their own risk. These are well-known approaches presented as an educational concept, and example securities for illustration only. They are not a recommendation to buy, sell or hold any security, are not ranked and are not a personalized portfolio. Security numbers, fees and tax aspects may change; check them yourself in the current documents before any action. For US citizens, all securities here are generally PFICs (details).

US citizen? What to know before investing

US citizens must report and pay tax in the US even when living in Israel. As a result, some funds that suit an Israeli investor may be costly and complicated tax-wise for them, so check this before buying, not after.

What exactly do I need to know?
  • Non-US funds (PFICs): a fund domiciled outside the US, such as an Irish UCITS fund or an Israeli ETF or mutual fund, is generally a PFIC under US tax law. That means punitive taxation and annual reporting on Form 8621.
  • US funds: an ETF domiciled in the US is generally not a PFIC for a US citizen. You still need to check its implications in Israel.
  • Reporting accounts outside the US: an investment account in Israel is a foreign account. If the combined balance of all your accounts outside the US exceeded $10,000 during the year, you must file an FBAR. Above higher value thresholds, Form 8938 may also be required.
  • Tax in both countries: you may owe tax in both Israel and the US. The tax treaty and the foreign tax credit may prevent double taxation, but not always fully, and not always at the same time.
  • The brokerage: Israeli brokerages report to US authorities and ask for Form W-9. Some restrict which securities a US citizen can buy.

Note: the Tel Aviv-traded funds shown on this site as examples, including in the portfolio examples, are Israeli or Irish funds. For a US citizen they are generally PFICs, so they may be costly and complicated tax-wise. Check this with a tax adviser before buying.

This is general information only, and the rules are complex and change. Consult an accountant or tax adviser who specializes in Israel-US taxation before opening an account or buying a fund.

FAQ

Before you decide

Can I lose money investing?

Yes. The value of an investment can fall, sometimes significantly. You can lose part of your money, and with some products all of it. Diversification may reduce specific risk, but it does not eliminate risk.

Do I need to understand the stock market to start?

You don't need to be an expert or trade every day, but it is important to understand what you are buying, what the risk is, what costs exist and when you might need the money.

Is there a monthly amount that suits everyone?

No. The amount depends on your budget, goals, debts, emergency fund and account terms. Also check whether the institution where you open the account requires a minimum deposit.

What should I do if the market falls?

There is no single answer for everyone. It's important to know your risk level in advance, avoid rash decisions, and consider whether the plan still fits your goal and time horizon.

Can I withdraw my money at any time?

It depends on the product, trading hours, liquidity and account terms. Selling during a decline may end in a loss, and there may also be tax implications and costs.

How do I know which fund to choose?

The site does not give personal recommendations or a list of funds to buy. It offers a general checklist for examining the index, diversification, costs, currency, fund structure, tax and risk. For a personal decision, consult a suitably licensed professional.

Is investing permissible according to halacha?

The site does not give halachic rulings. Halachic questions may depend on the product, the investment structure and the ruling you follow. Check the specific product with a rabbi or an authorized halachic body, and don't assume any particular fund is approved.

Is Lechatan Bekavod connected to Excellence?

No. Excellence is a separate financial institution. The site provides general information and a referral link for opening an account. Opening the account, its terms, service and benefits are managed by the company.

Does the site receive a reward when I open an account?

Yes, the site may receive a reward or benefit when an account is opened through the referral link. Details appear in the disclosures at the bottom of the page.

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ACCOUNT-OPENING OFFER

Want to look into opening an investment account?

If you've chosen to open a self-directed trading account, you can reach the Excellence Trade website through the Lechatan Bekavod referral link. According to the company's offer terms, the benefit is a ₪100 joining gift and an exemption from account fees for the life of the account. Read the full terms and check the minimum deposit, fees and eligibility before opening the account.

Before clicking, check on the company's website:

  • What the minimum deposit is, if any.
  • Which fees apply, and which are covered by the exemption.
  • When and how the joining gift is received, and who is eligible.
JOINING OFFER · EXCELLENCE TRADE
₪100 gift
+ no account fees for the life of the account*
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*Subject to the terms on the company's website.
*Disclosure