Amidst sharp declines in world markets, veteran investor Amir Eyal, chairman and chief investment strategist of the Infinity Group, offers a seasoned perspective. In an interview with the Hebrew business news outlet Globes, Eyal reflects on his 40 years in the capital market and the major downturns he has witnessed. He explains, “Starting with the bank stock crisis, through the dot-com crisis, the subprime crisis, the coronavirus, and more. Every time, investors feared the end of the world, and it did not come. We try to act with a lot of experience, as little emotion as possible, and without hysteria.”

Despite the global market upheaval, the Tel Aviv Stock Exchange closed with a relatively modest 1% decrease on Monday. This decline is less dramatic compared to the collapse in Tokyo and sharp drops in early New York trading. Eyal attributes this resilience to the absence of foreign investors in the local market. “Foreign investors exited a year ago around the legal reform push. Now, we don’t see an outflow of funds from Israel. Those who wanted to exit have already left. Thus, the money here is managed by a minority of local players, including institutional bodies, which are mostly invested abroad,” he explains.

Interestingly, while stock indices in Israel declined, government bond indices climbed. Eyal interprets this shift as a risk-averse move by professional bodies. “Professional bodies think that bond yields are already high enough and reflect a high-risk premium for Israel. Therefore, there are interesting movements in the bond market, driven by entities that ‘play’ with the money in the Israeli market.”

Regarding the dramatic selloff in Tokyo, Eyal considers it primarily a local issue for Japan due to their high GDP debt ratio. However, he notes that the aggressive realization in technology stocks on Wall Street is impacting the Israeli market through dual-listed stocks like Nova, Kamtech, Tower, and Nice.

Conversely, Tel Aviv’s real estate shares are rising, buoyed by expectations of lower interest rates that would ease financing costs after two challenging years.

Eyal advises against panic selling, especially concerning major indices like the S&P 500. He points out that technology giants operate on a “winner takes all” strategy, making their platforms nearly unattainable in the near term. “You shouldn’t panic and sell the S&P 500 and move to bonds. The investment portfolio should be adapted to the investor’s tastes, and I would not do things impulsively. The declines are painful, but investments are for years to come,” he counsels.

Highlighting a fundamental principle of investing, Eyal stresses the importance of the investment price over the story of the business. “In 2022, the stock that fell the most was Zoom, which dropped 90% after its peak during the pandemic. When you invest money, you don’t invest in the story, but in its price. It could be an excellent business at an overpriced value, and you’ll lose money. Conversely, a bad story could be an excellent investment at the right price.”

Therefore, it is crucial to maintain a grounded perspective during these turbulent times. A cool head, steady hands, and a focus on long-term strategies are invaluable assets for investors navigating the current market volatility.