Wayne Gretzky, the famous Canadian hockey great, is someone whom I often reference and not just because I’m from Canada. He is quoted as saying, “I skate to where the puck is going to be, not where it has been”. Rather than attempt to coach hockey, we try to apply his quote to successful investing — especially when reflecting on lessons from Israel’s market rebound and the past three turbulent years. The challenge, of course, is to resist the herd mentality. When investors start running in one direction, it’s easy to feel that if you don’t join the stampede, you’ll be left behind. But history, and recent experience, remind us that successful investing requires conviction, patience, and perspective, especially when the crowd is panicking.
Rethinking the Crowd Mentality
2023 was a very hard year for Israel, long before the 7th of October. Unfortunately, most of the negative and toxic atmosphere was, at its core, political, but politics and economics often intertwine. In those very turbulent and destructive months, many investors started rethinking their investments in Israel, following the prompt of numerous Israeli high-tech and finance executives who were calling to leave Israel and move investments abroad.
Then the 7th of October happened, and Israel faced a national disaster, at a time when the country was horrifically divided, triggering not only geopolitical shockwaves but also deep pessimism in the financial markets. The local market initially tumbled sharply, and investors openly questioned whether Israel remained a stable place to live and invest.
The Flight to the Familiar
During that time, many Israeli investment companies began marketing funds tied to the S&P 500, the familiar benchmark of global strength. After all, the U.S. market had enjoyed an extraordinary run over the previous decade. Tech giants had delivered spectacular returns, and investors around the world viewed the S&P 500 as the gold standard of long-term performance.
Why take chances in a small, turbulent local market when you could invest in the most powerful economy on earth? For many, the logic seemed indisputable and large sums of money from the local retirement fund industry flowed into funds tracking the index. But investing is never about the past, it’s about the future.
Israel’s Market Comeback
As of October 2025, the picture looks very different. Fortunately, the high-tech call to abandon Israel was ignored by many. To highlight a recent development, Nvidia, the U.S. chip giant, has announced plans to triple the size of its development center in southern Israel. This follows its broader plan to establish a massive campus in the north of the country and recruit thousands of new employees across Israel.
Over the past two years, both global and Israeli markets have rebounded impressively but not equally.
According to performance data up to October 2025, the S&P 500 delivered a total return of 59% over the two-year period, while Israel’s TA-125 index returned an incredible 101%. On a 12 months’ basis, the TA-125’s return was 52.4%, compared to the S&P’s roughly 17%.
Currency Shifts and Local Advantage
Those figures are even more striking when viewed through a local investor’s lens. Because the U.S. dollar weakened significantly against the shekel during this time (-15% since September 2023), Israeli investors in dollar-denominated S&P 500 funds saw much smaller gains when measured in shekels. In contrast, Israeli equity funds, particularly those focused on high-quality local stocks, outperformed dramatically. Investors in S&P-linked Keren Hishtalmut funds earned around 30% over the period, while the funds with a larger allocation to Israeli stocks gained more than a 45%-50% return. Over the last five years, the S&P 500 has fallen from the top of the performance tables, while disciplined exposure to the Israeli market has proven to be surprisingly rewarding.
Gold’s Return to the Spotlight
Another fascinating story is gold. For nearly a decade, gold seemed to have lost its luster. It moved sideways, disappointing those who expected it to be a hedge against inflation or uncertainty. But in the past two years, gold has doubled in value.
Is it too expensive now? Possibly. But that’s precisely the point. Markets move in cycles, often in sharp and unpredictable ways. Assets that appear unattractive for long stretches can suddenly roar back to life. Successful investors position themselves for those shifts rather than chasing them once they’ve already occurred.
The Value of a Long-Term Plan
Periods of volatility and crisis test not only our portfolios but our temperament. The key to weathering these storms lies in maintaining a disciplined, long-term investment plan built around your personal risk profile and goals.
A solid plan keeps you grounded when markets swing wildly. It reminds you that investing isn’t about predicting the next year’s headlines, but about building enduring value over decades. Those who panicked and sold Israeli assets in 2023 locked in losses and missed the powerful rebound that followed. Those who stayed on course or even added to their holdings were rewarded handsomely.
This doesn’t mean that you should invest blindly. But it does highlight the importance of aligning your money with your convictions. If you believe in Israel’s long-term potential, its innovation, resilience, and human capital, then it makes sense to reflect that belief in your investment choices. If you’re more comfortable diversifying globally, that too can be a sound strategy, but it should be part of a coherent, long-term plan, not a reaction to fear or short-term noise.
Labinsky Financial helps investors think ahead and stay focused on long-term goals. Our disciplined, forward-looking approach translates market insight into clear strategy—balancing risk, optimizing opportunities, and keeping your portfolio aligned with your values. We don’t chase trends; we plan for them, helping you invest with confidence, clarity, and purpose.
Belief, Discipline, and Perspective
Investing is as much about psychology as it is about numbers. The past three years have reminded us that fear and euphoria both distort judgment. The temptation to follow the crowd is strong, but the crowd is often wrong, and an investment strategy that is based on knee-jerk reactions is far from sound. The investors who succeed are those who can zoom out and understand that markets move in cycles and currencies fluctuate.
If you believe in Israel, then invest in Israel. If you believe in global diversification, pursue that line. Either way, make sure your portfolio reflects your principles and long-term goals, not your sometimes volatile emotions.
Because in the end, the most important investment skill isn’t necessarily timing the market. It’s staying ahead of the curve by thinking beyond it.
With overwhelming gratitude for the safe return of our people who were taken hostage, and continued prayers for the return of our fallen, the full recovery of all those damaged, the safety of our soldiers in all their missions, and the security of our nation.