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 in the TA-125, 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.

What is the TA-125 Index?

The TA-125 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 was expanded from 100 stocks to 125 in 2017.

Is TA-125 a good investment?

Under the right circumstances, yes, the TA-125 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 the TA-125 Index:

  1. Choose an investment type
  2. Use our top tips to succeed
  3. Choose a platform to invest with

1. Choose investment type

Here are the most popular investment types you can choose when investing in the TA-125 Index:

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 TA-125 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 TA-125 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 TA-125 ETFs do. So if you’re going to buy a TA-125 Index fund, it might make the most sense to try and buy and hold you investment for a longer period of time, as if you want to be trading regularly it makes more sense to invest in the TA-125 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 into the TA-125.

  • Do your research. Investing takes hard work, perseverance, and study. Start your research by comparing the TA-125 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 from 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 on the TA-125 Index. 
  • 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 & TA-125 trading platforms. Online brokers 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 the TA-125 Index is fairly simple, 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 in the TA-125 Index 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.
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What should I do now? 

Ready to invest in the TA-125? Great! Then go to your chosen platform’s website, pick the type of investment you want to use to invest in the TA-125 Index, and click buy. 

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Written by: Harry Atkins
Harry joined us in 2019 to lead our Editorial Team. Drawing on more than a decade writing, editing and managing high-profile content for blue chip companies, Harry’s considerable experience in the finance sector encompasses work for high street and investment banks, insurance companies and trading platforms.