Soon after October 7, I was approached by a U.S. journalist who said he was working on a story “on how the war in Israel may be impacting financial advisors.” He explained, “I noticed on your profile that your firm works in both the U.S. and Israel, so I was hoping you’d be open to talking about how the conflict is impacting you, your firm and/or your clients.” To help him out, I prepared a summary of the points that I thought were important. Interestingly… perhaps tellingly… his editor dropped the story. Nonetheless, I decided to share my thoughts publicly, and hope you share them with people you know. Thanks for taking the time to read it.
B’sorot tovot,
Doug
Background
Professional: In 1992, I started working at Dean Witter (which later became Morgan Stanley). I was partners there with my mother, a vice president who had been in the business for 17 years. In fact, her mother (my grandmother) was one of the first women to be licensed as a stockbroker in America. After having learned from my mother the importance of being a real advisor and not just a financial product salesman, I realized that the best way to help my clients lead meaningful lives, was to leave the wire house world, become an independent advisor, and run my own company.
In 1997, I started Profile Investment Services, Ltd., based in Israel where my family lives, and I specialized in cross-border investing, helping people outside the United States deal with the intricacies of multiple financial systems, currencies, and regulations. Specifically, I help them open and maintain U.S. brokerage and IRA accounts. Licensed in both the United States and Israel, and also with other designations including being a Certified Financial Planner™ practitioner, a Global Financial Planner®, and a Trust and Estate Practitioner®, I have built the #1 American investment firm in Israel.
Personal: Nearly three decades ago, my wife and I made a life-changing decision to move to Israel. At that time, we already had one child, and this move felt like a natural choice, considering our religious background and the family-centric values deeply rooted in the culture of the country. While we were, and still are, proud Americans, our sense of belonging as Jews to our homeland was a powerful draw, rooted in our historical ties to the land dating back to biblical times. We now have four children, all of whom are grown up, married, and have children of their own (grandchildren are truly the best dividend of the parental investment).
Impact of the war
On October 7, 2023, Hamas terrorists violently breached the Gaza-Israel border, launching a ruthless attack from land, sea, and air that tragically claimed the lives of more than 1,200 Israelis. The magnitude of this tragedy is comparable to the profound impact 9/11 had on the United States, forever altering the course of Israel’s history. To put it into perspective, the scale of this horror is akin to the loss of approximately 40,000 American lives in the Twin Towers, more than ten times the 3,000 lives that that were taken on that day. The pain runs deep within every Israeli as nearly every family has loved ones who have fallen victim. Our sons and daughters are valiantly risking their lives on the battlefield to combat the enemy. I spend my days on the phone speaking with many people, and have not met a single person who does not have a first-degree connection with someone whose life was forever changed by the events of October 7th.
Although the situation is grim, Israelis know we will succeed since we have no other choice. We cannot afford to lose, because that would simply mean the end of our country, our lives, and democracy in the Middle East. We are heartened by the recent words and actions of some of our friends, especially President Joe Biden, who has not only condemned Hamas, but who has joined us in the fight against the Evil. On the other hand, we are disgusted, as are all good people, by the pro-Hamas/anti-Israel protests and comments, particularly on the college campuses and in some corners of Congress. For many, this war is opening their eyes to see that our former peace partners, not the least of which being Mahmoud Abbas (head of the Palestinian Authority), cannot even find the words to condemn the actions of Hamas. Those of us who had hoped for a peaceful resolution to the disagreements in the region have now come to realize that the support for the massacre of Jews is not just a small minority of Gazan terrorists; it’s from the majority that voted Hamas into power and others who refuse to pass moral judgement on those who would gun down children in front of their families, rape women, and behead babies. We are living in shock as the reality of the situation settles in.
Helping clients maintain perspective: As a financial advisor, one important part of my job is to help clients maintain perspective, both in good times and bad. People frequently make knee-jerk decisions when overwhelmed by emotions, and it’s at times like that when I feel that I must be there for them. Therefore, we have kept our office open the whole time, sent out emails and made phone calls to clients, and let them know about emergency plans in case we are not available. Time will tell what long-lasting impact the war will have on the markets, but history shows that the stock market usually recovers quickly after major world events… but not always. And of course, past performance is no guarantee of future returns.
Dealing with stress and trauma: In times of crisis, it’s natural to push financial concerns to the background. When our family and friends are still being buried and when our children and elderly are still being held hostage by the Palestinian terrorists, discussions about money may seem trivial or even vulgar. And it’s true. Money is, without a doubt, secondary in times like this, where the human cost is immeasurable.
However, even in the midst of these trying moments, there are valid reasons to consider the financial aspects of our lives, if only for a few moments. The trauma and distress stemming from these events may haunt Jews and Israelis for years to come. The scars run deep, and their impact extends far beyond the immediate crisis.
Scientific research has suggested that playing Tetris shortly after a traumatic experience could prevent the formation of distressing memories, which could potentially lead to post-traumatic stress disorder (PTSD).
My theory is that the magic is not in the game of Tetris itself, but in the power of diverting one’s attention. It appears that by engaging in activities or thoughts unrelated to the traumatic experiences, one’s mind can find relief from dwelling on the harrowing aspects of the situation. It’s as if these alternative thoughts compete with the haunting memories, providing one’s brain with a much-needed break.
By offering individuals the opportunity to focus on something other than the ongoing conflict, it’s possible that financial advisors, like myself, can help refocus people for a bit. This, in turn, might help mitigate the long-term psychological damage that could otherwise be inflicted by the persisting distress caused by the situation.
Making a human connection: Another reason why my team and I are proactively connecting with clients now is that I want to constantly send out a caring message. Currently, all of us in Israel desperately feel the need for support and unity. Personally, I’ve been amazed by the many people who have contacted me to express their fury at Hamas and their unconditional support for Israel. When I call clients, even for a one- or two-minute call to check in, it helps both them and me. I feel very close to my clients and treat them like family. Family reaches out in hard times. Usually the calls begin with each of us asking, “Who do you have in the army now?” And the other responds something like, “Four grandsons are in fighting units and are going in and out of Gaza.” For me, it’s my son, son-in-law, and nephews that have stopped everything to risk their lives to defend their wives, children, parents, friends, and fellow citizens.
Politics and money: On every level, from personal finance to governmental decisions, money matters. America’s releasing billions of dollars to Iran recently was a likely cause of the war since it allowed Iran to bolster its support for both Hamas and Hezbollah. As clients see the real-world impact of the flawed policy, they start to think about where they are investing their own money. Are they investing in companies that are helping the enemy? While we can see that the White House’s policy decision was faulty, the Biden administration’s initial unwavering support for Israel ’was encouraging and we can only hope that it will continue. It’s crucial to acknowledge that policy errors can occur at all levels, from the White House to personal portfolios. Some of these errors, like sending funds to Bad Guys, have catastrophic consequences.
I make it my mission to steer my clients away from potentially regrettable financial decisions, ensuring they align their decisions with their long-term goals and values. Since most of my clients reside in Israel, they appreciate the strategic advantage of diversifying their investments internationally, especially during times of geopolitical uncertainty. We’ve seen that, just like in politics, making sound financial choices can have a profound impact on one’s well-being.
Is America next? Many clients worry about what is happening in America right now, which is amazing given the chaos in Israel…. They point out the potential for Hamas/Hezbollah terrorists to embed themselves in the millions of illegal immigrants that have crossed the border from Mexico into the United States. They can quickly disappear into the sanctuary cities, and with ongoing financial support from Iran and its friends, they can prepare for a massive attack on U.S. soil. Israelis now see the ruthlessness of the enemy and we worry for our friends, family, and investments in America.
It may sound strange for an American to hear others worried about their safety, sitting comfortable in a corner office in a gorgeous skyscraper in San Francisco. But that’s how safe thousands of people felt on the 10th of September, 2001, that terrorism and evil couldn’t reach them. When Jews chant “Never Again” about the Holocaust, it’s not only a call to remember the 6,000,000 who were slaughtered by the Nazis. It’s a message to stay on guard, to avoid complacency, and to never let the enemy get the best of us. As Israeli Prime Minister Netanyahu says, “Never Again is Now.”
Sadly, Israel let its guard down for a moment on the Gaza border. Hamas took advantage and attacked. Clients here are concerned that America has let its guard down, too, and for way too long, allowing Jihadist sleeper cells to become dreadfully powerful. I cannot just tell my clients, “Don’t worry. America always bounces back.” On the other hand, there’s a great quote by General Stonewall Jackson who said, “Never take counsel of your fears.” Regardless of a potential attack on America, which we pray won’t happen, I do believe that the American spirit will always rise to take on whatever enemies strike against it.
The Israeli economy: My clients are dual nationals who live in shekels and invest in dollars. They are aware of the fact that S&P downgraded Israel’s credit rating and others as well. They are aware of the fact that post-war Israeli taxes will increase in order to pay the cost for security. And at the same time, we are the “Start Up Nation.” Our high-tech firms are working behind the scenes to release hostages, our NGOs are full of volunteers, and businesses are finding creative solutions to manpower and supply-line shortages. Things are messy, but we will prevail.
Charity
There’s a Jewish concept that posits a three-part formula for reversing a bad Divine decree: repentance, prayer, and charity. No one can or should claim to know God’s plans. However, when tragedy strikes, the Jewish approach is to engage to introspection. Since many of my clients are religious, we often discuss more metaphysical topics to try to understand what’s happening. I cannot claim any expertise in repentance or prayer, but I have what to say about charity. To the best of my knowledge, there is only one time in history that God ever told the Jews that they could test Him to see if He’s good for His word. And that is when He decrees, they should give charity, “And thereby put Me to the test, says the Lord, if I will not open the windows of heaven for you and pour down for you a blessing until there is no more need” [Malachi 3:10].
My clients, as well as many of our friends in America, have given that test a try, since Israel really needs some extra blessing now. I have been approached to give guidance in determining where to give and how much to give, and I’ve done my best to help people think through these decisions. In most financial planning cases I’ve seen in over 30 years in the business, I’ve always felt that people could afford to give 20% of their income to charity. In general, most of the very wealthy people have told me that in times of trouble, they have always upped their giving, and not only have I decided to be one of the twenty-percent people, but I’ve tried to encourage others as well. There are many worthwhile charitable organizations (who offer U.S. and/or Israeli tax-deductible donations) that help soldiers or victims of the war.
Another form of charity is taking action oneself. Israelis as a whole are trying to figure out how they can help. All clients I speak with have told me of a different grassroots effort in which they are involved. From fundraising, to washing soldiers’ uniforms, to volunteer babysitting and cooking for the wives whose husbands left on a minute’s notice to join the reserve army, to packing care packages, delivering goods, the Home Front is not just on the border, but in every community center in the country.
None of my clients have expressed regret about moving to Israel. On the contrary, they all stand firm in their commitment to Israel and proudly state, Am Yisrael Chai, the People of Israel live on!
I’d like to conclude with a fervent prayer that our hostages and soldiers return home safely, and Israel experiences a decisive victory over evil.
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 February 25, 2024.