One of the greatest benefits of the world’s globalization is that now investors have some incredible opportunities. Not so long ago, investing abroad was only affordable for people with huge fortunes. But today every person with a modest capital can try for a piece of that pie. And if you want that investment to pay off handsomely, Israel is definitely the best choice today. With an exceptionally stable economy and a currency that strengthens when the rest of the world is in turmoil, Israel is, quite possibly, the least risky destination for foreign investment.
But you need to remember that nothing is perfect. Therefore, to make money investing in the Israeli economy, you need to do it right. This means choosing the industry as well as the money transfer method very carefully.
Where Does the Strength of Israeli Economy and Currency Come From?
The USA-China trade war and Brexit, as well as a multitude of other incidents in recent years all, affected the world economy greatly. The result of this is a surge in instability and an overall grim prognosis for the majority of countries. We might not be in a world crisis yet, but the situation definitely isn’t looking good for millions of entrepreneurs and investors.
Those things considered, the Israeli economy stands out on the global arena not only due to its current growth but also the fact that it’s predicted to keep growing. That growth rate might be slowing down a bit, but it’s still positive and the economy itself currently is the most stable in the world. Israel has no inflation to speak of and unemployment is nearly non-existent in the country. That alone is enough to make it an attractive destination for investors.
However, the country also has its currency’s exceptional position going for it. The shekel is in a unique position where it’s actually strengthening while the rest of the big world currencies are wavering.
The USA-China trade war is a major factor that caused the recent bout of instability in the global currency market. With yuan weakening rapidly the impact touched every major economic force. It seems that a currency war might be afoot soon.
But even with this going on, shekel strengthened by 9% against Euro and 6.6% against the US dollar. Moreover, the Bank of Israel officially stated that it won’t be cutting its interest rate on the foreign currency exchange. The bank is maintaining this position despite all major EU, China, and US banks doing exactly that. This makes shekel one of the best currencies to invest in if you are into FX trading.
Investing in Israel: Things to Consider First
There is no doubt that with its exceptional economic stability, Israel is one of the prime investment destinations today. However, you have to consider a few things before you start pouring your funds into the Israeli economy. Without this, you might end up not making any profit regardless of how good the conditions in the country are.
- Money transfer fees.
Money transfer fees and FX rates are always a concern for investors because they might end up eating up your profit margin. Bank wire transfers might cost as much as 3% of the transaction value. Therefore, it’s imperative that you research alternative ways to transfer money to Israel from USA. Leading FX companies today offer transfer costs under 1% and they provide hedging tools. Those can be a great help for investors as they will reduce your risks further.
The most popular investment markets are stocks and residential rental property. However, in Israel of 2020, these are the worst investment options you have. In fact, you are bound to end up with big losses if you go for it. Therefore, you must research investment possibilities the country offers and choose spheres that are truly promising. Even if you’ve never invested in such things before, this will have the added benefit of diversifying your portfolio.
What Are the Best Industries for Foreign Investment in Israel?
If you want your investment money to work for you well from Israel this year, you should consider:
- Venture capital funds.
VC funds are growing rapidly here, but they have rather high requirements. If you can meet those, you definitely should consider this as one of the safest investment options.
Israeli technology is near the top of the world already and it’s developing at an unprecedented rate. According to predictions, this market will keep its rapid progress adding billions in a single year. Now is the best time to jump onto this wagon as you’ll see returns fast.
The technology boom powers the emergence of very promising startups. Entrepreneurs in Israel have very good conditions for business development. Therefore, becoming an investor now might make you a part of the board for the next top global corporation. Also, startups in Israel are extremely diverse. This means you can reduce risks by choosing options from a variety of industries.
- Commercial properties.
Residential rental properties do not offer a good yield in Israel today. However, commercial properties are exactly the opposite. They are growing in demand, especially office and coworking spaces in big cities. If you prefer investing in real estate, this is the best option for you.
In Conclusion: Should You Invest Your Money in Israel?
No investment is without risk, but investing in Israel definitely is one of the safest routes in 2020. This country has a very stable economy that keeps growing despite the turmoil in the rest of the world. This made Israel a safe haven for many creative and well-educated people. This resulted in the country’s workforce being truly outstanding.
Those young and talented experts and entrepreneurs are driving progress and creating projects that are guaranteed to succeed. Investing in those promises high yields, and it doesn’t matter which industry you choose to invest in.
The stability of shekel also reduces the risk of putting your money into various Israeli businesses. And if you are clever about using online money transfer companies, you might mitigate those risks further with the help of hedging tools.
All in all, if you want to use globalization to become an international investor, Israel should be in your portfolio in 2020.