Israeli investors, including American olim, who have U.S. investment portfolios tend to have a global outlook on the markets. They’re interested not only in investing in Israeli-based companies but in diversifying their assets with purchasing stocks or funds in other countries as well.
Diversifying your portfolio across various global regions and asset classes is considered proper portfolio design for long-term financial success. Here are two considerations to keep in mind when tailoring your U.S. investment portfolio as an oleh living in Israel.
Dual citizens have a unique currency risk that is balanced between two currencies:
- Living currency: The currency you use to pay for everyday living expenses.
- Reference currency: The currency you use to calculate your net worth.
It is common to diversify savings and investments between the two currencies, but how do you determine how much and what to invest where?
The important thing is that you do this based on your unique situation — rather than on news about foreign currencies or pressure from your American brokerage firm to close your account because you no longer live in U.S. With the latter, you especially want to watch the potential tax liability of having an account, like an IRA (individual retirement account), closed out early.
Next is just understanding the amount of information that’s available to you. Sometimes it’s too much information. You might get seventeen emails with differing opinions on what’s happening in the market. Too much information, like too little information, can cause people to make rash decisions with their money.
Monitoring your own portfolio is a great move, and it really helps to find an advisor who helps you handle your strategic allocation and diversification. But don’t get caught up in the daily overload of information you see online or read in the news. Speak with someone who can guide you based on your goals and timeline and who can help you keep a cool head when markets seem volatile.
Right now, we have 12 open spots for a Free Cross-Border Financial Evaluation to determine how we may be able to help you improve your situation. Schedule a session at profile-financial.com/call
Douglas Goldstein, CFP®, GFP®, is the director of Profile Investment Services, Ltd. www.Profile-Financial.com He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.
Published January 23, 2024.