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A lesson in what not to do

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By Michael O’Connor

The S&P 500 ended last week down 14%, a bitter pill to swallow for many investors. Still, these losses pale in comparison to the earth-shattering declines that some of the more speculative sides of the market are currently experiencing.

Today's article – A lesson in what not to do.

The tech-led NASDAQ index is down 22% in 2022. ARKK, once the highest-flying tech fund on Wall Street, has come crashing down to earth, down over 70% from its highs and lastly, spare a thought for those taking maximum risk; NFT and Altcoin traders are getting their faces ripped off as we speak.

But didn't we all know this was going to happen?

Didn't the incessant and illogical rise of these speculative Crypto and Tech positions have to end in tears eventually?

The simple answer is yes.

But the 'when' and 'how' were always unknown.

When everyone is playing and winning, it's easy to convince yourself that you can play and win as well. It's hard to imagine the music stopping when it has been playing for so long.

People do crazy, illogical things all the time, even when they know better. This isn't the first time that greed pushed investors towards self-destruction, and it certainly won't be the last.

This article isn't intended as a snide rebuke of the investors who hold these positions. Many of those currently watching their trading accounts crater also made phenomenal gains in 2020 and 2021.

This is merely a cautionary tale highlighting that markets are cyclical, investment strategies come in and out of favour, and nothing lasts forever.

Most importantly, always know the difference between speculating and investing.

As humans, we are drawn to speculation. We buy lotto tickets not based on probability but on hope. You can ignore the statistical improbability of winning by uttering four naïve but equally alluring words: "ya, but what if".

After all, technically speaking, 'it could be you'.

In recent years, many people 'invested' in their stock position based on the same rationale. It wasn't based on the company's solid fundamentals or attractive free cash flows; it was determined purely on the basis of 'what if?'. What if it continues going up? What if it doubles again? Let's face it, for many; this argument can be far more enticing than any precise financial projections.

There is nothing technically wrong with this speculative approach, provided you realise you're doing it, and it is done in small doses. Still, you need to separate this from your investing portfolio. They're not the same thing.

90% of your assets should be positioned to generate returns over the long term. Your focus should not be on betting it all on a low probability outcome with the outside promise of winning it big.

This seems obvious, but many convince themselves they are investing based on probability and risk-adjusted returns when they are actually just closing their eyes, crossing their fingers and spinning the wheel.

Make sure you know the difference.

Investing 101

Create a balanced and diversified portfolio of equities, real estate, commodities and alternatives based on your view of the world in the future, your time horizon and your risk tolerance.

Invest in indexes you believe will be successful over the long run and then allow enough margin for error through diversification to protect when you are wrong.

And you will be wrong, but that's ok. You just need to be right more often than you are wrong.

If you would like to learn more about how to start investing, go to theislandinvestor.com.

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Donie McCarthy to be remembered by Firies GAA with golf classic

On the approach of the second anniversary of his passing, Firies GAA have taken the opportunity to both acknowledge and pay tribute to the late Donie McCarthy by organising a […]

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On the approach of the second anniversary of his passing, Firies GAA have taken the opportunity to both acknowledge and pay tribute to the late Donie McCarthy by organising a golf classic in his name. Donie was a key figure; player, coach, mentor and officer in the club for many years.

Michael Quirke, former team mate and part of the events’ committee, outlined the significance of remembering and acknowledging the legacy that Donie left to his beloved club. “Donie exemplified the concept of a club stalwart, his love of both the game and the development of the club was boundless. His energy towards the development of young players is truly visible today in Firies. Donie got great satisfaction from seeing young players improve, and as they got older and achieve success with Firies. During his successful playing days, he helped lead Firies to secure the O’Sullivan Cup title in 1979 and went onto manage and coach many Firies teams down through the years. Since his untimely passing in November 2022, the club has aspired to acknowledge his legacy.”

Final preparations are being put in place for the classic which takes place on Saturday, July 13, in Maine Valley Members Golf Club, Killorglin. The classic, which includes GUI handicap applied with a maximum adjusted handicap of 24 for men and 36 for ladies, promises to be a great day celebrating Donie, with top team, nearest the pin, and longest drive prizes.

Family, friends and former club mates of Donie gathered to officially launch the golf classic in Pairc Eamonn, along with Kerry Senior Footballer; Dara Moynihan to lend his support the event. The Firies GAA Club were eager to recognise L. & M. Construction, of New York City for their generous contribution towards The Donie McCarthy Memorial Golf Classic. The American company, has strong club connections and supports many of the club events. “Without this support, we would be unable to organise such events. The Club would also like to acknowledge the members who attended the launch today from young to old to recognise Donies’ contribution”. A club spokesperson said this week.

If you or your club are interested in submitting a team of four at €200 per team, you can contact Brendan Quirke 087-9172854, Dermot O’Connor 087-6958610, Michael Quirke 087-6683699 or Maine Valley Members Golf Club 066-9761979. Likewise, sponsored tee boxes are available for €50.

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Muckross Lottery goes online

Muckross Community Association has announced the launch of its new online facility for playing the Muckross Lottery. The Muckross Lottery community fundraiser has operated since 1995, raising thousands of euro […]

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Muckross Community Association has announced the launch of its new online facility for playing the Muckross Lottery.

The Muckross Lottery community fundraiser has operated since 1995, raising thousands of euro for the benefit of local community groups and bodies including Loughquittane National School, Muckross ICA and Muckross Rowing Club among others.

Over the years, countless prize winners have also benefited in the share of jackpot and Match 3 prize wins.

The first Muckross Lottery draw was held in the summer of 1995, a year which also saw the opening of the Muckross Community Centre.
At the time, the lottery draw was a first of its kind in Killarney and was to set a fine example for the many other sports club and community lotteries that were later established in the town.

The community fundraiser has continued to be a vital support, initially securing the completion of the Muckross Community Centre and over time generating funds for the development of school, community and sporting facilities in the Muckross area.

Since 1995, the lottery has been sustained by the unwavering commitment of local sellers and a dedicated committee within the community association.

A number of the lottery’s founding members continue to sell weekly tickets to this day in support of local causes.

In a move with the times and ahead of the 30th anniversary of the Muckross Lottery, the association is now building for the future and launching its new online lottery facility.

Ahead of the online launch this month, the Association has collaborated with Irish company ClubForce, a leading provider of online lottery systems, to develop the secure online system.

It is hoped the new online facility will generate new lottery sales, extend the lottery’s reach to those living abroad and sustain the community fundraiser long into the future.

Existing lottery supporters who avail of the online option can also enjoy the benefits of new features including a weekly results email, ticket auto renewal and access to ticket purchase history. The Association are also keen to highlight that existing hard copy tickets will continue to be available and sold as normal.

The Community Association is seeking the support of all residents of the Muckross area and all those with a connection to the community, to spread the word and get behind the new online lottery.

Online tickets can now be purchased ahead of the weekly draws on June 22, June 29 and throughout July.

The jackpot for June 22 stands at €5,050 with a rollover each week if the jackpot is not won. Online lottery tickets can be purchased each week (3 tickets for €5). A single €2 ticket can also be purchased for multiple draws. The lottery’s annual ‘green’ ticket is also available online for €100 and continues to include two free draws.

Link to Muckross Lottery online.
https://muckrosscommunityassociation.clubforce.com/products/lotto/muckross-community-assocation-lotto

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