Israeli Investment Chief Identifies Key Indicator for Buying and Selling Tel Aviv Stocks

Erez Koptesh, newly appointed head of investments at Hachshara Insurance and former senior analyst at Discount Bank, shared his insights on the Israeli stock market and global economic trends. Drawing from his extensive experience in mergers and acquisitions and equity strategy, Koptesh emphasized the importance of monitoring trading volumes as a signal for when to buy or sell stocks on the Tel Aviv Stock Exchange (TASE). He explained that unusual spikes in trading volumes often indicate institutional investors adjusting positions, which can signal market tops or bottoms, especially in Israel’s smaller, less liquid market.

Koptesh discussed the current global economic environment, highlighting persistent but temporary inflation in U.S. service sectors and the impact of geopolitical tensions, such as the Iran conflict, on oil prices reaching $90 to $100 per barrel. Despite these pressures, he forecasts a shift within six months toward deflation and lower interest rates, driven by the dual potential outcomes of the AI revolution: either a dot-com bubble-like crash or productivity gains leading to deflation through workforce reductions. He estimates an 80% chance of deflation occurring.

For portfolio management, Koptesh advises extending bond durations when yields rise to leverage future capital gains as yields fall. He recommends a diversified portfolio with roughly 50% equities split between U.S., Israeli, European, and other global stocks, alongside government and corporate bonds, alternative assets, and cash reserves. He notes that bonds now offer attractive yields around 5%, making them a safer complement to equities.

Koptesh identified three promising sectors in Israel: banks, defense companies, and IT firms. These sectors have recently rebounded after significant declines, with banks benefiting from operational efficiencies and strong returns on equity, defense firms supported by global budget increases, and IT stocks recovering after adjusting to AI-related market fears. Internationally, he favors large infrastructure companies accessible via ETFs like XLU and sees potential in real estate amid expected rate cuts.

He concluded by stressing the importance of long-term investment horizons of 5 to 7 years to weather market volatility and cautioned short-term investors about underestimated risks. Koptesh’s analysis offers practical guidance for navigating the complexities of the current market cycle in Israel and abroad.