The Blogs: So, What Should I Actually Invest In?

Hey, please read the financial disclaimer below before reading this.*

Okay, so you’ve opened the account, and you’ve transferred the Shekels, converted to Dollars. Now you’re staring at a blank screen wondering, “What stocks do I actually buy?”

[Note: If you haven’t transferred money in, you may be interested in this article: How to Transfer Shekels into Interactive Brokers.]

How much you invest is a totally personal situation, but what you invest in—if you are under 40 and in it for the long haul—has a pretty straightforward answer for most “normal” people.

The Long-Term Game

First, we need to define “Long Term.” I am talking about money you want to touch in 20, 30, or 40 years. This is money for future-you to have a great life.

If you need this money next year for a wedding or a home down payment, stop reading. The stock market is volatile. It can drop 20% or 30% in a given year. If you put money in today that you need tomorrow, you might be in trouble.

But, if you are putting money away that you don’t need in the foreseeable future, my recommendation is simple: The S&P 500.

Why the S&P 500?

The S&P 500 is an “Index Fund.” Instead of trying to pick the one winner—like betting on a single horse—you are betting on the entire race track. It is a collection of the 500 biggest, most successful companies in the US stock market.

Because the US economy is so massive, you are essentially betting on the world economy. (Companies like Microsoft or Apple, while listed on the U.S. stock exchange, sell their products everywhere. So you’re basically betting on the world economy growing and getting bigger over time, as it has done throughout history.)

The beauty of it is that it cleans itself:

If Apple stops being cool for our grandkids, it will drop out of the top list.
If Elon Musk decides to leave his companies and move to Mars, and Tesla tanks, you won’t lose your whole life savings. Tesla will only be 1 out of 500 companies you own, making each company just one small part of the basket.
When new, amazing companies emerge and become successful, they get added to the list automatically, kicking out the lowest performing companies.

You don’t need to spend 16 hours a day researching balance sheets. Unless you are a professional, you probably won’t beat the market anyway. So, just be the market.

The Rule of Thumb: Doubling Your Money

Historically, the market goes up and down, but over the long term, it goes up.

A good rule of thumb is that your money invested in the S&P will double roughly every 7 years.

If you invest 10,000 Shekels today:
In 7 years, it’s ~20,000.
In 14 years, it’s ~40,000.
In 21 years, it’s ~80,000.
In 28 years, it’s ~160,000.
In 35 years, it’s ~320,000 and so on…

This is the magic of compound interest. The earlier you start, the better.

The Specific Ticker: What to Type in the Search Bar

Now, here is the technical part that matters for people living in Israel.

You can’t just “buy the S&P 500.” You have to buy a specific fund that tracks it. I have done the research, and for most Israelis (who are not US citizens), I have settled on one specific ticker: VUAA

Why VUAA?

It is “Accumulating” (The “AA” part): This is crucial. When companies pay out profits (dividends), I don’t want them sending me a few dollars cash. I want that money immediately reinvested to buy more stock. VUAA does this automatically. It’s like a snowball rolling down a hill—it just gets bigger and bigger without you touching it.
Tax Efficiency: It is listed on the London Stock Exchange (LSE) and domiciled in Ireland. For non-US citizens, this is generally much better for tax purposes than buying a fund based inside the USA.

The Process:

Go into Interactive Brokers.
Convert your Shekels to US Dollars (USD).
Search for VUAA.
Click Buy.

Important Note for US Citizens

If you are a US citizen living in Israel, do not buy VUAA. The IRS has specific rules that make foreign funds a tax nightmare for you. But to be honest I don’t know much about the specifics for US citizens – consult a professional.

If you are a US citizen, you generally want to stick to US-based funds. The most popular version of the S&P 500 for Americans is VOO (by Vanguard).

Summary

My strategy is boring, and I love it.

Transfer Shekels.
Convert to Dollars.
Buy VUAA (or VOO if you are American).
Do nothing for 20 years.

Don’t panic when the graph goes down. Just keep buying. Over time, history shows it goes up to the right.

*I am not a financial advisor or licensed professional. I am just a normal guy sharing my personal experience and opinions for entertainment and informational purposes. This should not be read as financial advice. If you want actual financial advice, please go to a licensed, registered service provider. I highly recommend speaking to Blue and White Finance (I’m not affiliated with them at all, they are just excellent and will be able to put you on the right track.)