Trading in the stock market in May 2021 was conducted alongside the decline of the Coronavirus in Israel. Following the decreasing numbers of active cases, the Ministry of Health announced that starting on June 1st, the Coronavirus restrictions, which included the "Green Badge" as well as the "Purple Badge", would be lifted.
Israeli Stock Market Following the expansion of economic activity, there was a decrease in the unemployment rate, as shown by the CBS (Central Bureau of Statistics) data. According to the latest data, the rate of temporarily unemployed due to the Coronavirus together with the permanently unemployed decreased from 9.5% in March 2021 to 7.9% in April 2021. As shown by data from the Bank of Israel, the Composite State-of-the-Economy Index for April 2021 increased by 0.25%, following an increase of about 0.4% in each of the months of February and March 2021. Moreover, this month's trading was also affected by the publication of financial statements for the first quarter of 2021 by publicly listed companies. It should be noted that the tension that led to rocket fire at settlements around the country and the military operation Guardian of the Walls, as well as ongoing contacts to form a government, had no significant impact on trading. Trading on the Tel Aviv Stock Exchange in May demonstrated an increase in most of the leading stock indices, with the TA-35 and TA-90 indices rising this month by 3% to 4%, and each of these indices rose in total by about 14% from the beginning of the year. The Tel Aviv-SME60 index fell by about 1.5% this month but is still about 18% higher than the level it was at the beginning of the year. Future Predictions How will the stock market perform in 2021? According to Haim Toledano, an experienced investor and well-known entrepreneur, stocks are expected to continue to rise as the economy recovers from the Covid-19 crisis. Furthermore, he expects corporate earnings to grow by 21% in 2021 as a result of a growing economy. Haim Toledano reiterates that this does not mean that one should put his whole nest egg into the stock market based on these optimistic expectations. However, if one sits on his money and waits for a substantial pullback in stocks, the current notion suggests one`s waiting may take a while. As Haim Toledano states, the problem in this approach is that by waiting too long to invest, one forfeits his greatest asset as a long-term investor: time. Final Thoughts To conclude, in 2021, analysts nearly across the board expect inflation and rising interest rates, two elements stock investors detest, to remain at bay. However, in order to stay on the safe side, one should ideally have an emergency fund that can cover 6 to 12 months' worth of expenses.