Epsilon CEO Sees Market Correction as Buying Opportunity Amid Strong Earnings
Epsilon CEO Raviv Carmi views recent stock market corrections as buying opportunities rather than trend reversals. Backed by strong corporate earnings and macroeconomic growth in Israel and the US, Carmi advises maintaining equity exposure.
Despite recent market volatility driven by tech sector pullbacks, Raviv Carmi, CEO of Epsilon from Phoenix Holdings, remains optimistic about the outlook for stock markets both in Israel and the United States. Speaking on the broader economic trends, Carmi views the current downturns as a healthy correction rather than a trend reversal, noting that historical statistics heavily favor long-term equity growth over real estate, bonds, and deposits.
According to Carmi, robust corporate earnings growth in the United States—where 80% of reporting S&P 500 companies have beaten expectations—indicates that the market is far from being in a bubble. He points out that the S&P 500 forward P/E ratio currently stands at 18, compared to its historical average of 20, while investors rotate capital from volatile tech and semiconductor segments into defensive sectors such as healthcare, water and electricity infrastructure, and consumer staples.
On the domestic front, Carmi describes Israel's macroeconomic indicators as an economic miracle. Israel boasts a GDP growth rate of approximately 4.7%—ranking first among OECD member states—alongside a shrinking deficit of 3.2% of GDP. However, he cautions against economic complacency, warning that structural reforms, workforce integration, and careful handling of international sanctions are vital to maintaining financial stability.
For investment portfolio allocation, Carmi advises conservative investors to divide their assets between 20% Israeli equities, 20% US equities, 50% Israeli corporate bonds with an average rating of A-plus and a four-year duration, and 10% Israeli government bonds. For aggressive investors, he recommends increasing equity exposure to 35% in Israel, 28% in the US, 7% in the MSCI World Index, and allocating the remainder to corporate bonds.
