On video: The government approved the state budget for 2024 15.01.2024/Video (upload): Omer Miron / L.A.M., Sound: Ben Peretz / L.A.M.
Israelis prefer their money resting in bank accounts, thinking that the dangers inherent in it are reduced more than in decades of hard investment work.
The amount of money in the Israelis' current (checking) accounts in the banks emphasizes their aversion to working with their money lest it be cut off during the investment, allowing about NIS 600 billion to simply "lie" in accounts with an almost zero return, alongside about NIS 300-400 billion in deposits with a return defined as "low".
What the Israelis do not take into account is that the mere "storage" of money reduces its power, due to inflation. Inflation is a price increase that, in practice, lowers the value of the currency (the shekel) and its purchasing power. Thus a certain product that previously cost 100 shekels , for example, will now cost NIS 110, and will erode the value of our money by 10%.
So any savings or deposit is irrelevant to preserving the value of money if it does not meet at least the increase in inflation for the period in which it is closed.
The public, however, benefits from access to money in And in short-term deposits, even if it is only an emotional matter.
Money of the savers by route segmentation.
About NIS 720 billion in training and provident funds/screenshot, Walla system!
But what about the public funds that are far from his reach as part of the provident savings and training?
Risk aversion, as well as a lack of understanding of the capital market and the investment tools available to savers, are also reflected there.
Employed and self-employed people in Israel hold approximately NIS 720 billion in various training and provident funds as of the end of 2023. This is according to the data of the Hemelnet website operated by the Capital, Insurance and Savings Authority.
Most of the savings for the medium term is in the 'general' route (41.33% of the funds), which is the default route into which savers who prefer reduced risk are placed, alongside savers who prefer default over choosing an investment route due to their lack of familiarity with them.
at an exclusive discount
The Israeli company that invented hair removers does it again
In collaboration with Epilady
the stock exchange.
Stock routes yielded much more/Reuven Castro
The general route contains several types of investment, including non-tradable investments, which are considered to "protect" the investment against sharp downward fluctuations in the capital market.
On the other hand, the "shares" route is defined as an increased risk route, due to its increased exposure (compared to the other investment routes) to tradable investment avenues such as stocks, which are characterized by volatility.
Only about 11.5% of savers are in the stock track.
The average cumulative return for the last 5 years in all the provident and training funds in the general route, however, stood at 26.16%, with the highest return at 64.66%, while the few who decided to take a risk in the shares route achieved an average cumulative return that was up to about 65.5% for that period , where the highest yield found among the funds and funds in this route was 144.64%.
In other words, a saver who closed about NIS 100,000 in a provident fund or an education fund had, after 5 years, an average increase of about NIS 26,000 in the general route, and in contrast, someone who closed his money in an education fund or provident fund in a share-based route had an average increase of about 65,000 shekels.
In the capital market, however, there are no guarantees.
Beyond the difference in returns between the bodies that manage the funds and funds (and the range of yield differences is wide), the question of risk is also expressed in the timing of the maturity of the fund or the provident fund, such as the year 2022, which cut the funds and funds by considerable percentages.
Alongside this, the average cumulative return for 5 years until the end of 2022 in the equity route, among the training funds that were active during this period, was about 30.5%, compared to an average cumulative return of about 16.4% in the general route for the same period.
Whether you distrust the capital market or the entities that manage your savings and are risk-averse, or whether you are a compulsive gambler, your money can always be more active, and more careful.
Your vigilance to the route of money is required at all times, as well as learning about the types of route it takes and the entities that transport it.
More on the same topic:
Savings
Education fund
provident fund
investments
yield
stock