How to invest in the TA-125 Index
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The TA-125 Index offers a great way to put your money into the Israeli economy. There are many different ways to invest, and we’re here to show you everything there is to know about this stock index to help you make an informed choice about how to invest your money.
Where can I buy into the TA-125 Index?
What is the TA-125 Index?
It is a stock market index of the 125 largest companies traded on the Tel Aviv Stock Exchange, as measured by market capitalisation. The index was launched in 1992 and expanded from 100 stocks to 125 in 2017.
Is it a good investment?
Under the right circumstances, yes, it can be a good investment. Israel is one of the world’s best-known countries when it comes to producing innovative technology and telecommunications companies, which often see quick growth as new tech is adopted. Just keep in mind that with stock indices, the time at which you invest is key. When markets are bullish then investing in an index is likely to see good returns, but when bear markets set in then indices typically struggle.
How do I invest in the TA-125 Index?
Here are some steps you should follow when investing in any index:
- Choose an investment type
- Use our top tips to succeed
- Choose a platform to invest with
1. Choose investment type
Here are the most popular investment types you can choose when investing:
ETFs
An exchange-traded fund (ETF) is an investment fund traded on a stock exchange during regular stock market hours, giving these diversified products the same flexibility as trading individual stocks. ETFs are structured to hold a variety of assets at a time (such as the 125 stocks in the TA-125 Index), so you can grow your capital in line with an index while still being free to trade your investment at any time. TA-125 ETFs are also inexpensive to trade compared to some other investment types, making them a popular choice among investors.
Individual stocks
You can also choose to invest by buying a bunch of individual stocks (or even all the stocks) within the index in separate trades. In that scenario, you would then be able to gradually sell the worst performers in the index one by one, until you’re left with a small group of top performers. This is an expensive and time-consuming process, however, as you’d need to carry out 125 individual transactions to buy the stocks, and then even more if you choose to sell any of them. This method is only recommended for more selective investors who have lots of both time and money on their hands.
Mutual funds
An index mutual fund (also called an index fund) is an investment fund that attracts capital from many different investors, then uses that money to invest in the index. Mutual funds can only be bought at the end of the stock market’s trading day, and cost more to trade and to own than ETFs do. So if you’re going to buy into a fund, it might make the most sense to try and buy and hold your investment for a longer period of time, as if you want to be trading regularly it makes more sense to invest in an ETF.
2. Use our top tips to be a successful investor
You now have a better sense of which investment types you can use to invest in the TA-125 Index, as well as where to invest. Before going through the process of investing, read through our tips to bear in mind when putting your money on the line.
- Do your research. Investing takes hard work, perseverance, and study. Start your research by comparing the index to other investment opportunities, and use this to build a sound personal investment plan. With a plan in place before you start investing, you can avoid having emotions such as fear and greed clouding your judgment when you make investment decisions.
- Set a budget. Consider how much you can afford to lose before you invest. To manage your risk and limit the size of your losses, we recommend setting a stop-loss order after you make your investment. For example, if you don’t want to lose more than 10% on your trade, set your stop-loss price at 10% below your purchase price.
- Select the right platform. Your specific investment goals will often affect which platform best suits your investing needs. If low transaction fees are your top priority, you should probably choose an online broker. For high-level investment advice, it might make more sense to choose a financial advisor. Choose according to your requirements to find the perfect platform for you.
- Grow your investments gradually. Beginner investors make lots of mistakes, so be sure not to take unnecessary risks when starting out. As you get better at investing, you can slowly start ramping up the size of the investments you make.
- Think long-term. Thinking long-term means always keeping your goals in mind, and then making sure all the decisions you make help you take steps to get closer to where you want to be. If you lose money on a trade, process it and then move on rather than letting emotions get the better of you. Be patient and disciplined, and use sound investment thinking and smart planning to achieve your investment goals.
3. Choose a platform to invest with
Here are the most popular choices for where to invest in the TA-125:
- Brokers & trading platforms. Online stockbrokers offer low transaction fees, and user-friendly interfaces to make trading cheap and easy. This makes them a great option for many investors – especially those who like to do things on their own. If you want more hands-on investment advice, however, you’ll likely prefer different investment options.
- Robo advisors. Robo advisors are platforms that use algorithms to make trades automatically. These platforms typically charge fairly affordable transaction fees for these services, but not quite as low as you’ll find with a broker. Also, some robo advisors will let you discuss investment strategy with an actual person to hone your approach. This offers a balanced service that suit some investors perfectly, but if you want an extra level of personalised service then you might want to consider a financial advisor.
- Financial advisors. Financial advisors provide the highest level of customer service and investment advice out of all available investment options. They’ll help you set financial goals, explain many different investment options, and help you build an investment plan that works for you. As you might expect, financial advisors charge more for that high level of service, so you need to weigh up if they’re worth the expense. As investing in an index is fairly simple nowadays, it’s unlikely to be worth shelling out for a financial advisor if this is the only investment you’re looking to make.
- Banks. If convenience is your number-one priority, investing with your bank enables you to store all of your financial ventures in the same place. The problem is that banks often charge high fees for investments, without offering the same level of service that top financial advisors provide. Most investors can find better value for money elsewhere.
Ready? Here’s our top recommended broker
What should I do now?
Ready to invest? Great! Then go to your chosen platform’s website, pick the type of investment you want to use to invest in and click buy.
Try some of our investment courses for beginners
Not feeling ready to invest yet? No problem. Improve your investing skills by reading the easy-to-understand investing courses and frequent news updates that we offer at Invezz.
Stock Markets 101
Long-term Stock Investing
Short-term Stock Trading
Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >