The Day of Atonement is about accounting for one's deeds. So TheMarker asked investment houses if they had any regrets about what they did or didn't do over the past year.

While many managers of the public's funds apparently preferred keeping any misgivings to themselves, a few agreed to discuss their thoughts.

Going abroad

Elah Alkalay, vice president of business development at IBI Investment House

Over the past year we should have done more investing abroad. We shouldn't have invested in Israeli companies - not in communications, food, finance, real estate or industry. Between the rhetoric about reducing concentration in the economy and legislation closing down small dairy farms, it would have better to keep away from the blue-chip TA-25 index and the TA-75 index.

Looking back, fleeing overseas was probably the right move. One of the most important lessons in the capital market is not to do now what was right to do a year ago. Today the Tel Aviv Stock Exchange is very cheap.

Regulators understand that overregulation comes at a price. The press understood that there's a price for launching crusades. After asking forgiveness on Yom Kippur we should all be a bit less angry and be open to earning a bit more from investing in the Holy Land.

In the Jewish year just ended we should have fumed less. We were upset about everyone making money, forgetting that economics isn't a zero-sum game.

The resentment on Rothschild Boulevard carried into the Knesset and government.

Between overregulation, a lack of transparency in government, the uproar over Iran's missiles and the uproar over haircuts, there was no room for local returns on investment.

Had we focused on letting more people make money - whether employees of the Maariv newspaper, the 6,000 people laid off by cell phone companies, contract workers or bank employees - their savings and pensions, as well as ours, would probably have gone in a different direction."

Targeting indexes

Yaniv Pagot, chief strategist at the Ayalon investment group

We regret not maintaining self-discipline. We should have stuck to our earlier understanding that now is the time to invest in stock indexes rather than individual stocks.

Investment managers tend to boast about their ability to choose winning stocks ... and beat the market indexes. In the past year, shares of Mellanox Technologies, which rose sharply against our expectations, gave us another lesson about staying humble.

The previous two years we got the same lesson from Perrigo shares. But it turns out that many investment managers have an ingrained hankering for choosing individual stocks or trying to time the market.

The cherry pickers view investing in stock indexes as something done by amateurs. Most had serious underexposure to the TA-25 pair of winning stock the past few years and dramatically underperformed the related indexes.

We believe that if the TA-25 index had soared to record levels and prices of its underpinning stocks had been high, increasing the weight of individual stocks in investment portfolios at the expense of direct index holdings would have been justified.

But as long as the Tel Aviv stock market is far from its peak, the best action is to stay rooted in stock indexes, shielding us from trouble with individual stocks while exposing us to the broader potential of companies trading at reasonable prices.

Hedging risks

Joseph Fraiman, CEO of the Prico investment group

Many importers and exporters could have finished the Jewish year with better results had they prudently hedged their exposure to foreign currency and interest rates. Many companies consider the effects of rate fluctuations unavoidable, beyond the ability of mere mortals to contend with.

As a result, many avoid hedging their exposure risks to foreign currency and at the end of the year regret this. Transactions with foreign currency exposure in [the Jewish year] 5772 involved a potential of about 10% in volatility. For many companies, this gap could mean the difference between profit and loss.

The foreign currency market isn't the only source of volatility. Interest rates, as well as commodity and raw material prices, also suffer from volatility. Exposure to fluctuating prices often leads to large losses.

Methodical planning and currency and interest risk hedging is largely confined to the economy's big companies, while most managers of smaller firms depend on luck, telling themselves that things will turn out all right. They tend to act on fluctuating currencies only when they have no choice, when the timing isn't optimal.

"The financial world is becoming more complex, wild and unpredictable. Companies that want to cope need to progress from a culture of accepting risks to a culture of managing risks.