Mitav Investments Chair Abner Stepcak Advises Ultra-Orthodox on Financial Strategies Amid Market Volatility
Abner Stepcak, chairman and co-owner of Mitav Investments, shared insights on the current financial landscape and investment strategies tailored for Israeli households, particularly within the ultra-Orthodox community. Speaking with 'Bachadrei Haredim,' Stepcak highlighted the challenges posed by rising living costs, high interest rates, and global economic fluctuations. He noted that despite recent declines due to security tensions, the Tel Aviv Stock Exchange remains relatively expensive, urging investors to proceed cautiously and selectively amid ongoing volatility.
Globally, Stepcak identified the United States as the most expensive market, with Israel also priced high but not in a bubble, while Europe offers more balanced valuations and Asia and emerging markets present the most attractive investment opportunities. He attributed the strong performance of leading global indices to the rapid profit growth driven by artificial intelligence (AI), concentrated mainly in a few large corporations. However, smaller and medium-sized companies face difficulties due to high interest rates, a trend also seen in Israel.
Stepcak emphasized that the biggest beneficiaries of AI will be companies that effectively utilize these technologies to improve efficiency, citing Mitav itself as an example. He warned of significant employment challenges ahead, especially for white-collar and entry-level financial jobs, as AI and robotics could lead to increased unemployment and workforce reductions in Israel.
Addressing a common dilemma in the ultra-Orthodox community, Stepcak challenged the traditional belief that investing in a second residential property is the safest and most profitable option. He described Israel's housing market as overpriced with low rental yields, contrasting it with the stock market's higher long-term returns. Using compound interest examples, he demonstrated that investing in equities with an 8% annual return could yield four times the profit of conservative 4% investments over 30 years.
Stepcak also cautioned against overly conservative savings approaches common in the community and warned about financial scams involving day trading, unregulated cryptocurrencies, and misleading agricultural land sales. He praised Mitav's leadership in offering a wide range of halachically compliant financial products and financial education tailored to the ultra-Orthodox, highlighting the success of their "Savings for Every Child" program, which recently shifted to a 100% equity portfolio to enhance long-term growth.
Haim Itskovitz, Mitav's ultra-Orthodox sector manager, added that the community has a strong culture of long-term saving despite limited incomes, focusing on future needs like children's education, weddings, and housing. He stressed the importance of financial products that meet these specific needs and the value of professional, culturally aware service.
