U.S Stock market
The year 2007 brought with it a severe economic crisis in the United States (also known as the sub-prime mortgage crisis), which led to a prolonged sharp decline of the three major stock indexes in the U.S.
- Dow Jones (industrial index): Declined 51% from October 2007 until March 2009, from 14,165 points to 6,926 points.
- Nasdaq (Hi-tech index): Declined 54% from October 2007 until March 2009, from 2,810 points to 1,293 points.
- S&P 500 (500 largest companies in the U.S.): Declined 56.8% from October 2007 until March 2009, from 1,561 points to 683 points.
Stock Market “Recovery”
In the subsequent four years following the lows described above, the stock market has witnessed an unbelievable recovery. Both the Dow Jones and the S&P500 have reached all time highs, with each rising 220% and 249% respectively, while the Nasdaq has been privy to an even larger percentage growth – 293%.
Advantages of Trading in the U.S. Stock Market
- Smaller commissions: Due to the higher degree of competition among the different financial institutions active in the stock market, trading commissions tend to be much cheaper.
- International Exposure: Diversifying your portfolio to include companies that are based abroad opens up many new pathways towards profits.
- Short Positions: As opposed to the TASE, the U.S. stocks markets have the technological capabilities to allow individuals must greater freedom in purchasing or selling short positions for securities and other financial instruments.
- Vast assortment: The assortment of stocks, bonds and financial instruments available in the U.S. vastly outnumbers the options available on the TASE.
- Trading Volume: When compared to most international stock exchanges, the U.S. stock exchange’s daily trade volume is simply astronomical. As the trading volume rises, the potential ability for profit becomes greater. Additionally, the vast trading volume allows for greater flexibility when purchasing by declaring your own Ask/Bid price.
- Trading Hours: In general, the U.S. stock market’s trading hours are from 16:00-23:00 Israel standard time, which allows for easy access for the Israeli public.
There are significant tax advantages when investing in the U.S. In Israel, capital gain is taxed at 25% tax rate. However, in the U.S., the number is significantly lower:
- On capital gains that are held for over a year: Taxed at a rate of 0%-15%, depending on your income bracket
- On capital gains that are held for less than a year: Taxed at a rate of 10%-35%, depending on your income bracket. However, if you make less than 85,650$, you will not pay more than 25%
Note: An individual earning less than 9,750$ or a married couple filing as a joint return earning less than 19,000$ in a fiscal year are not taxed at all for their capital gains.
American citizens with a SSN can open an investment account in a quicker and more streamlined process.
Please note that most financial institutions require a current U.S. address as part of their registration process. It is important ensure that you can provide one.
As a service to our clients, we have attached simple guidelines for opening an account with accompanying options for the different types of investors.
- Private investors: Individuals who trade and make transactions in an autonomous way – click here.
- Non-private investors: Individuals who trade stocks through a brokerage management companies (for a fee) – click here.
Virtue Tax continues to help our clients navigate the crucial tax implications of investing in the U.S. stock market. Oftentimes, investing in the U.S. market entails several complicated tax repercussions. Advanced planning of the potential tax implications of an investment can often have a major impact on the worthiness of an investment.
Our goals are simple: To provide our clients with the appropriate knowledge to choose a wise investment strategy and concurrently to assist in proper and effective tax planning in order to collect the maximum profit from the investment.
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Opening a U.S account
Working with an Investment Manager
Tips and advice before buying properety
Tips and advice before buying property
Contributing to the Community
Us, at VirtueTax believe that beyond excellence in providing professional services toour clients, we must assist and support those in Israeli society whose fate has not improved.Our vision includes business entities and social entities joining hands together and having a shared sense of drive to promote all aspects of Israeli society. Therefore, we have a deep commitment to both Israelis in need and to voluntary bodies focused on helping them. As part of this mission, the company purchases and delivers essential products to those in need in cooperation with organizations such as the “Association for a Turnaround in Education”. Our additional area of activity focuses on transferring funds as donations to animal shelters such as “Jerusalem loves animals” and “Mateh Yehuda loves animals”. We believe that our active involvement in Israeli society, provides not only an important service to the community, but also improves our professional teams.