Investing between two homes: What Jewish-American portfolios can learn from 20 years of data - oped

For generations, Jewish-American families have viewed investing in Israel through two lenses. One was financial. The other was personal—rooted in identity, connection, and long-term belief. Often, these two did not fully align.

Investing in Israel was sometimes seen as meaningful, even important, but not necessarily optimal from a strict financial perspective. The United States, with its deep markets and global corporations, was assumed to offer the best risk-adjusted opportunities. 

Israel, by contrast, was viewed as a smaller, more concentrated market, worth exposure, but not central. 

That assumption deserves to be revisited. With a current, historic, exchange rate of 3 NIS per 1 US$, investment in Israel as become even more appealing. 

Why the Question Has Changed

Over the past two decades, Israel’s economy has matured, its financial markets have deepened, and its real estate sector has undergone a structural transformation. 

At the same time, U.S. markets have delivered strong returns but also increasing concentration and new forms of volatility. The result is a very different investment landscape—one in which the question is no longer whether to invest in Israel, but how much.

The Data Behind the Answer

To answer this, I examined 20 years of data (2005–2025) across five core asset classes: 

1. US equities (S&P 500)
2. Israeli equities (TA-125 Index)
3. US residential real estate
4. Israeli residential real estate and 5. Short-term government bonds (T-bills)

Using a portfolio framework balancing return, risk, and diversification, I constructed optimal portfolios under different assumptions.

The Core Result: Diversification Across Borders

At every level of risk, the optimal portfolio includes US stocks, Israeli stocks, US housing, and Israeli housing. These markets are driven by different economic forces, which means combining them reduces overall risk without sacrificing returns. The conclusion is simple: investors should not choose between the US and Israel—they should combine both.

Once exchange rates are included, the picture shifts. The Israeli shekel’s strength over time enhances returns for dollar-based investors. Israeli assets—especially real estate—become more prominent in optimal portfolios.

The Case for Israeli Real Estate

Israeli housing stands out due to structural drivers: population growth, limited land, regulatory constraints, and strong demand. For US investors, returns come from both rising property values and currency appreciation, creating a dual engine of returns. From Complementary to Central, Israeli investments are no longer secondary. They are part of a more efficient global portfolio structure. The interaction between US and Israeli assets is what drives improved outcomes.

Across all portfolios, Israeli assets remain central—and increasingly important as risk tolerance rises.

Practical Takeaways for Investors

For Jewish-American investors in 2026, the key lesson is to think globally and strategically. First, diversify across borders and view currency exposure not as a risk alone, but as an opportunity. Second, assign real estate a central role in long-term portfolio planning, particularly for investors with extended time horizons. Finally, ensure financial decisions are aligned with long-term objectives, prioritizing durability and strategic positioning over short-term gains.

A New Investment Narrative

For an American, investing in Israel is no longer just about connection. It is about constructing a stronger, more diversified portfolio, Just as investing in the US is for Israelis. Home and away are not alternatives. Together, they form the smarter strategy.