Investing in Israel with Brian Mumbert

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Hi, I'm Rob West. Israel is a tiny country, but a powerhouse for investing opportunities, particularly in the tech sector. Brian Mumber joins us today for a look at Israel in a different light. And then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is faith and finance, biblical wisdom for your financial decisions. Well, it's always a joy to have our friend Brian Mumber on the program.

He's vice president for regional sales at The Timothy Plan, an underwriter of this program and one of the pioneers of faith-based investing. Brian, welcome back. Thank you, Rob.

Happy to be here. Brian, on one of your previous visits, we touched on investing in Israel, but I want to take a deeper dive into that topic today. I know Timothy Plan, of course, has a fund for this, which we can talk about in a bit. But first, why is Israel in particular an attractive place to invest, despite what often seems like incredible geopolitical turmoil?

Well, yes, Rob. As we all know, there's turmoil that erupts from time to time in the Middle East and with Israel, but it has been a country that is incredibly resilient. Israel has an entrepreneurial spirit that runs through their people, and they are really self-starters. They're eager to develop something new. And I saw that firsthand when I went over there.

Everyone is just working, very busy. You go downtown in Tel Aviv and you see this firsthand. Technology, of course, is really big on Israel, which I know we're going to talk about. But really, what's interesting about Israel is they're a country that culturally has a low view of debt. When I had the privilege of going over there years ago with a group and our fund manager when we first started the fund, we were visiting with one of the heads of finance over there, and they talked about how they set the entire population piggy banks to remind them about saving, about how to be good stewards of what they have and how the country would be good stewards of what they have.

And they would be in the saving world with them. And so this makes their financials just a really great investment. So it's quite interesting to see it firsthand. Yeah. That's really fascinating. Let me ask you, though, is it safe to invest in Israel from the perspective of national security?

It absolutely is, Rob. They're regulated just like everybody else. Israel has their own stock exchange, the Tel Aviv Stock Exchange. They have their own index, the Tel Aviv 125, which when we first started the fund was just the Tel Aviv 100. And so those are the 125 highest value companies over there in Israel. And then even during times of heightened issues and wars that can occur, the economy just kind of keeps really moving. And I like to go back to using the U.S. as an example. During World War II, of course, our stock markets experienced volatility. But overall, the Dow gained 50% from 1939 to 1945. So even during times of peril and issues, the market and the country and business continues to run.

Yeah, that's helpful. You know, we don't talk a lot about Israel's economy. How would you describe, Brian, its health and even the impact on stock performance? You know, Israel can sometimes feel like a little bit of a forgotten nation. They were once big in the emerging market space. And then in 2009, they graduated to the developed economy space.

And this was really a positive thing for them. But in the scheme of things, it kind of worked out a little bit against them because in emerging markets, they were picked up in all of the funds. And then once they graduated into the developed economy, you know, a lot of the international funds, ours and others included, really focus on large-cap developed economies.

And so you get a lot of Europe, a lot of Japan, and Israel being such a small country kind of gets left out of that entirely. But the economy itself is really moving in a positive direction, especially with the change of presidency here in the U.S., a little bit more of our firm commitment to the country. Unemployment over there and inflation are quite low.

Yeah, I know they are. And that makes it a fairly attractive investment. And I know it's often referred to as a startup nation. In fact, there's a book about Israel with that title. When we come back from our break, I want to dig into what is often seen as one of the most compelling sectors for investment in Israel, and that is their robust tech sector. We'll talk about that and how effective they are at exporting their tech products and systems and what other sectors might be appealing to investors.

And also, we'll touch on the Timothy Plan Israel Common Values Mutual Fund, which is a really easy way to invest in Israel. Brian Mumford here today. Brian is our good friend. He's vice president of regional sales at Timothy Plan, an underwriter of this program.

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With me today, my good friend Brian Mumbird. Brian is vice president for regional sales at Timothy Plan, an underwriter of this program and a real pioneer in the faith-based investing space. If you want to learn more, you can head to timothyplan.com. We're talking about investing in Israel today. We hear so much about Israel geopolitically and it's a nation that we enjoy just a long history with as a nation here in the US. But what about as an investment? Well, Brian's been sharing with us some of the compelling aspects of investing in Israel. In a moment, we'll get to how you can do that easily through one of Timothy Plan's funds, the Israel Common Values Fund. But let's talk about one of the most robust sectors of Israel's economy and that is the tech sector. What do we need to know about that, Brian?

Well, sure, Rob. I mean, high tech over in Israel is about 12% of the Israeli workforce and it contributes to 20% of their GDP, so it's quite large. Many of the companies, you may have never heard of these names. Most of them I can't pronounce, but a lot of them get absorbed into big companies like Apple and Google over here in the United States and utilized for technology in our phones and our computers. They use for their data storage, numerous things.

One example that I could give would be car cameras. Mobileye came out of Israel and a lot of the technology that's in all of our newer cars today that will stop for you before an accident occurs or monitors driving came out of Israel through a company called Mobileye. And one of my favorites, Waze, a map app that was developed by a gentleman over there that couldn't figure out how to have enough time to get to work driving through the old city of Jerusalem where there are very small roads that wind around. And so he decided to crowdsource that thing and now that app is one of my favorites to use on my phone. And one of the more interesting things, not even tech, is cherry tomatoes came out of Israel.

I couldn't believe it. What do you know? Next time you eat a salad with cherry tomatoes, you can thank Israel for that.

That's great. Now, is the Israeli government supportive of tech advances in the private sector and how does that affect the market? Yes, the government is incredibly supportive of the tech sector because they see the value for their economy. Just to give perspective on this, Israel is the third largest tech hub by capital raised and it's only behind Silicon Valley here in the United States and New York City. Interesting. Yeah, who would have thought?

I know. Let's talk beyond technology. What other sectors might be attractive to investors invested there? We talked a lot about financials a little bit earlier. Their concept of debt is just extremely important. You can't undervalue that because here in the United States, we get bogged down so much in government spending.

Right now, Doge is in the news all the time trying to cut spending and this and that. But here in the US, we have a challenge with our national debt and over there, their cultural spirit that they just do not seek to take out debt really just lends their financials to be great investments. And then outside of that, there are just a number of companies that are doing things.

We discussed cherry tomatoes. They invented drip irrigation over there as well, things like that. So it's things that we see in our everyday life that come out of such a small country and it all goes back to that entrepreneurial spirit that they have.

Yeah. Well, I know they're working on exporting a lot of these products as well and that goes back to the tech sector there and even intersects with some of our US companies. Talk to us about how successful they are at exporting. Yeah, Israel is incredibly successful at exporting. Over 50% of their total exports are tech, if you can believe that. Particularly, Apple invested in Israeli tech startups a number of years ago. They bought a company called PrimeSense.

Apple's bought another company called Anobit, an Israeli semiconductor firm that contributed to enhancing storage for Apple stuff. Really, being over there and seeing it, you have all of these tech companies, Apple, Google, Amazon, Meta, and they're all there looking for the next big thing and absorbing them into their companies. And so you can easily see why so much of their exports is made out of tech. And so they're very friendly to it. What about Israel's relations with other countries? How is that impacting investments there?

Yes, it's been good. Remember a couple of years ago, the Abraham Accords came about and really normalized relationships with them and other Middle East countries. Obviously, their relationship with the US is great or we wouldn't have all of our biggest tech companies over there in the first place. But really looking forward to this year, it seems like normalizing relationships with Saudi Arabia is on the table as well as the war draws to a close. And so we know Israel for the enemies that they have around them, but by and large, the countries that are there around them are very supportive.

Yeah. What about venture capital? Do they have a strong venture capital presence? And how does that relate to investing?

Absolutely, Rob. I mean, Israel has more than 276 active venture capital funds. And we've already talked about how Israel is really only second to Silicon Valley in New York, but this shows no signs of slowing down. This year over year, the market really continues to expand. And as recent as 2019, Israeli companies were considered more popular than their American peers. And this is really interesting. Investment in Israeli startups grew by 140% from 2014 to 2018.

And in the US, at the same timeframe, that was 64%. So wildly, wildly popular in the venture capital presence for sure. Yeah. Well, let's talk about the Fund of Timothy plan because I know you all make it really easy to invest in Israel and your fund is the Israel Common Values Mutual Fund. What do our listeners need to know about that? It's a unique fund, as I kind of discussed before. It's one that's not really present in your general international space. So if you're investing in a broad international fund, you probably don't have any Israel exposure in there. But what I love about having a mutual fund that has active management on it is that you're able to really react in real time to what is going on. So when you have issues like the war that occurred here, you have a manager that's looking over this to trim your exposures to financials, if that's going to be an issue there. There are some ETFs out there that are more passive and they do invest in Israeli companies, maybe not all domiciled in Israel. I think the other one thing that really makes the Timothy plan fun and unique is that at a minimum, at least 80% of the companies in that portfolio do have to be domiciled in Israel as well. So that combined with active management, you look at the performance and the way things have gone. It's really interesting watching how last year drew to a close. The Israel Stock Exchange itself was up over 20% and much of that really occurred in the second half of the year.

So things can turn very quickly over there as the country really normalizes relationships, the war comes to a close and it could be a really exciting space for investors. Yeah, no doubt. And just like everything at Timothy plan, I assume this fund like the others are screened for Christian values, right? Absolutely. Every company is screened for the same values from abortion and pornography and on down to ensure that Christians get to invest with their values and at the same time support a country that is near and dear to many of our hearts here.

Yeah, very good. How can folks get more information, Brian? Oh, they can absolutely check it out on the website Timothy plan.com. We have a section for Israel. We also have some pieces out there on why to invest in Israel and why someone should consider it.

So that's something they can take a look at there as well. Excellent. Well, I appreciate the deep dive today. We're grateful for our partnership with Timothy plan and the great things you've been doing in the faith based investing space for a long time. Thanks for your time today. Thank you, Rob.

Happy to be here. That's Brian Mumber, vice president for regional sales at the Timothy plan, a pioneer and leader in the faith based investing movement and a partner here at faith and finance. Check them out timothyplan.com. Back with your questions after this, the number 800-525-7000.

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800-557-1985. Great to have you with us today on faith and finance. I'm Rob West taking your calls and questions today at 800-525-7000. Let's go to Indiana WGNR. Hi, Greg.

Go ahead. Yeah, Rob, but I just sold my home at $200,000 profit and capital gains. I've just got to sit in my personal checking account savings, but it's not really gaining anything and looking to buy another home could be six months, nine months.

But just wondering the best place to put that amount of money to build a beginning something a little more different than the half percent that I go in and need to buy a home. Maybe I've got a little bit more cash to put down on home. Yeah. Was this a rental property, Greg? No, it was just my home. Okay.

Personal home. Yeah. So are you going to have any capital gains on that? I shouldn't at just a $200,000. I think I'm up to qualified. You can get up to $250,000. That's right.

As long as you live there two out of the last five years prior to the sale. So yeah, that you should be in great shape there. You know, you can get right now in, you know, high yield savings four and a half percent with FDIC insurance pretty easily.

So that would be probably what I was be looking for. I mean, that would allow you to have FDIC protection. You know, you'd have complete liquidity. And then on 200,000 over the next 12 months, you could get $9,000. That'd be taxable, but you know, that's not a bad return on that money with the safety and the, you know, the, the liquidity. So what I'd probably do, it's going to have to be an online bank. I'd probably go to bankrate.com and see if you can find the one that, you know, you you're comfortable with. They use a five star rating system, and then they'll give you the APY, the annual percentage yield.

And you know whether or not it's FDIC insured, although they all would be. Thank you, Rob. Okay. Very good, Greg.

Listen, all the best to you as you think about what's next before you buy the next house. We appreciate it. Let's go to Texas. Hi, Ruben. Go ahead. Hey, Rob. It's my first time caller. I got a pretty simple question.

I think, I don't know. I'm almost 70, a veteran with no money. I think I have $2,000. But you know, I read the Bible every day. I can't make it to church like I want to because I have to work to make my pennies. But I, my whole life, I've been a big believer in tithes.

So you don't think this is too bland. If I went to a Christian faith broker that introduced me to, I don't know, CD, a mutual fund, annuity, something, or at least $100 a month, I could put away and pray over that as a tithe. And I would never touch the money, of course. And then the day I die, it's give it the trust of the brokerage firm to dispense it through like else programs or, you know. Yeah. What do you think? Well, I appreciate the way you're thinking about this, and I appreciate that you've prioritized the tithe.

I think we should. I mean, when we look at God's Word and all the different times in the Old Testament, you'll find the idea of tithing in 15 different instances in Scripture. The word itself is used nearly 50 times. And when you kind of walk through it and see the big idea there, it was, you know, faithfully giving initially to the local church to advance the gospel and rightly compensate our spiritual leaders. And I think that honors the Levitical tithe that we see in the Old Testament. And then there was other tithes. I think, you know, there was a charity tithe where we give to the weak and the needy.

You know, there was another tithe where, you know, where we honor the pre-law tithe that, you know, we give financial gifts to Christ as priest and king, just as Abraham did for Malchizedek. So, you know, I think when we look at the gospels and we look primarily at the Old Testament around the use of the tithe, you know, my thought is that we should be givers. We should prioritize giving. I mean, our giving as New Testament believers should be, first, that it's a priority. Second, that it's proportionate to how God provides for us. Third, that it's sacrificial. We should feel it when we're giving. You know, I think we look at 2 Samuel 24, I will not offer burnt offerings to the Lord my God that costs me nothing. So I think true generosity requires sacrifice. And then we should give cheerfully. The apostle Paul reminds us of that in 2 Corinthians. But I would say, here's just my perspective. I think this is ultimately between you and the Lord.

It's a conviction matter. I would rather you get that money into the kingdom now and be a part of God's activity now, rather than putting it away and trying to grow it modestly so some other steward can give it away. I think your job and my job as stewards right now of what passes through our hands that the Lord graciously entrusts to us that He owns, we should be thinking about how we can give it and be a part of His work today, right now, and get it into the kingdom for the advancement of the gospel. So I would offer that counterpoint for you to think and pray about, that rather than putting it into CD and letting somebody else steward it down the road, I would say let's get it to work in God's kingdom first, starting with the local church, but then not stopping there, giving beyond that as well. So that's going to be my best advice, my friend. You pray about that, ask the Lord to give you some wisdom and peace of mind on that, and then you make that call. God bless you.

Kenosha, Wisconsin. Hi, Jacob, how can I help? Hi, I had a question. So I've been thinking about purchasing a rental property, and I have recently been wondering if it might be a wiser decision to meet with a financial advisor and maybe invest it into the market instead of purchasing a rental. Yeah, so tell me kind of the decision making process you've gone through to arrive at this. So I would like to have passive income right now I'm single, and I'm doing well, you know, thank God for that, but I'm trying to plan for the future and try to have a little bit more income coming in for when God does bless me with a family. And so that's what has me thinking about a rental property, but I started thinking about maybe investing into the stock market because I know there's a lot of time being caught up in a rental property you know maintaining taking dealing with tenants all of that.

And I'm already pretty busy. So I was thinking that maybe investing into the stock market might be a better option and I don't really need the passive income right now so it would have time to grow. Yeah, I like that a lot and you're right they can take time I mean if you were to hire a property manager that's just an additional expense you'd have to cover historically rental properties yield somewhere between three and 6% annually in net rental income after expenses, and then three to 5% in the property appreciation. So that's not bad you know with 150,000 depending on how much you want to take on, you could buy something five or 600,000 with 20 to 30% 25 to 30% down, but you are going to have, you know, the the upkeep and the oversight, and there's risk there because you're highly concentrated in one asset versus the diversification of the stock and bond portfolio. And on top of that, as you said, you know, there's the. Do you want to put in the time and attention to be a landlord I think if you're not looking for that.

You've got plenty on your plate without that, and you want good broad diversification I think getting an advisor who could manage that for you on a passive basis probably fits the bill a little better. Hope that helps. Well that's going to do it for us today. We said big thanks to my team today to hear it, Amy, Jim and Anthony couldn't do it without them and everybody here at faith five you'd like to support our work, help us reach more people become a partner at faith by.com just click give we'll see you next week. Bye bye.