Tuesday, May 7, 2013

Back In the Market

For the past several weeks I have been sitting back and allowing my cash reserves to build again. I have done this by a mixture of cash dividends, stopping several of my dividend reinvestment options as stock prices rose and adding a little extra cash as I had some left over at the end of the month.

It doesn't take long to build a good cash reserve that way and so now I am in a position to go out and buy some new stock.

My current policy of maintaining bonds and some dividend stocks has served me well. My market exposure has been mostly solidly within the US with only a small margin overseas, mostly in Emerging Nations ETF stock.

Recently one of the most interesting areas of potential has looked to be Israel.

I have seen a great deal of talk about that nations potential, a major innovator rather than producer, Israel enjoys the benefit of having a global demand for many of its products but little internal production concerns. If the Israelis can create a product, then other nations often beat a pathway to their door to buy the rights to produce the product for them.

Licensing products can be very lucrative for the licensor.

I am therefore thinking of dipping a toe in Israel's waters with the addition of the iShares Israel Fund. (EIS ) The EIS Fund holds a basket of Israeli stocks, from banks to chemicals and technology companies.

One thing that is a limiting factor for me is that this ETF only pays a semi-annual dividend in June and December. it is at a high point at the moment in the mid $40's range and so I will earmark it for a buy when the price falls a little after the June dispersion of dividends.

In the long term I am looking to put about 5% of my portfolio into overseas ETF's and this will be my first foray into that arena, though there is always a risk in Middle East stocks, I don't see the risk in these Israeli stocks as being a major factor as there seems to be with European stocks at the moment. By the end of the year I think we will see a more stable environment in Europe and so a chance to build a more secure footing on those markets too.

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