Investing your money in Israel

STAV ADLER SPECIAL TO THE JEWISH BULLETIN

I am sometimes asked, "Other than making donations or performing volunteer work, how can I support Israel?"

While there are many answers to this question, one way to stand behind Israel while serving your own individual interests would be to consult with an investment advisor who can verify the ethical content of your investment portfolio.

Certainly, obtaining adequate financial returns while assuming an acceptable amount of risk is always paramount when making investment decisions. However, ethical qualifications are quickly becoming an important consideration for the investing public. In fact, the majority of mutual fund families now operate ethical funds for this rapidly growing group.

Ethical investing can be broken down into two parts: choosing ethical investments and avoiding unethical investments. There are no exact rules to this type of decision making because each individual has his or her own set of values. However, there are some basic values that most people share. Generally, ethical investments include companies with labor practices that avoid causing illness, disease and death. They also avoid destroying or damaging the environment and treating honest, hardworking people with disrespect.

Ethical investing also reaches into the political landscape. For example, some Jews prefer not to invest in German companies, while others will not buy German cars. Many anti-Israeli organizations, such as SUSTAIN, have called for the boycott of companies that sell to Israel, such as Caterpillar and Johnson & Johnson.

While the process of making investment decisions based on personal values will vary from person to person, investing for financial gain requires a more scientific approach. Many Jews make it a habit of buying Israel Bonds every year. This is a great way to support Israel and make a secure investment. However, this win-win benefit need only be the beginning. Investing in stocks or corporate bonds of Israeli companies is also an option.

To help investors evaluate the credit-worthiness of Israeli corporations, Maalot, the Israeli security rating company, analyzes Israeli businesses for their financial strength and stability. Affiliated with the Standard and Poor's rating service, Maalot provides a rating system that is familiar to North American investors.

Surprisingly, there are more than 125 different stocks of Israeli companies bought and sold on American stock exchanges. Although most of these companies are anchored in the technology sector, real estate corporations such as Equity One, medical device suppliers such as Elscint, pharmaceutical companies such as Teva (see article below) and food retailers such as Super-Sol are also available.

Reaching a little beyond Israeli companies are major corporations that directly or indirectly invest in Israel. A plethora of international companies such as Agilent, Cisco Systems, Magnum Technologies, Pepsico, Johnson & Johnson and Microsoft, to name a few, have acquired or taken equity interest in Israeli companies in recent years.

While these corporations support Israel's economy and recognize the excellent value that Israel can offer, there are also those that oppose it. There are many anti-Israeli organizations that boycott companies who do business with Israel. People who take these matters seriously and seek to invest ethically should examine their holdings to ensure that they are not inadvertently supporting companies that do not satisfy their own personal standards. After all, investing ethically is not only about doing the right thing; it is also about not doing the wrong thing.

Stav Adler is an investment advisor and insurance broker at Canaccord Capital Corp. He can be reached at 604-643-7518 or at [email protected]. The views expressed in this article are those of the author alone and are not necessarily those of Canaccord Capital Corp., member CIPF. Readers should not consider the opinions or investments mentioned in this article as advice or recommendations and should consult a professional before making any investment decisions.

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