Connect with us

News

Five questions to ask yourself before buying a stock

Published

on

0253610_Mike_Stocks.jpg

By Michael O’Connor, theislandinvestor.com

When it comes to investing, nothing is certain.

There are no perfect stocks to buy because there's no way of predicting the future with 100% accuracy.

The truth is, investing is hard, and building a portfolio of top stocks that beat the market is something that even financial professionals have trouble doing consistently.

For most people, investing in index funds is the perfect hands-off approach, providing broad exposure to the stock market at a very low fee. Even my own personal portfolio is made up of roughly 70% ETFs despite the fact I invest in the market for a living.

But I believe some stock picking is a good strategy for many hands-on people.

Taking a small portion of your overall portfolio and diligently selecting a small number of companies to invest in gives you an opportunity to learn about the investing process and fully understand the businesses you are investing in, which helps to build conviction in your positions.

From a psychological standpoint "collector's instinct" kicks in, enabling people to participate and invest more money over time.

Lastly, for Irish investors, there are tax benefits to consider. If you invest in individual stocks, you are taxed at the CGT rate of 33%, and the first €1,270 of your gains are exempt from CGT each year. When investing in index funds or ETFs, you are taxed at the exit tax rate of 41% with no annual exemption.

For those interested in picking individual stocks, here are five questions you should ask yourself before investing in any company.

Do I understand the business?

Too many people invest in businesses they don't understand because it 'sounds good'. If you have no idea how the company works, you won't have the conviction needed to hold onto the stock when an inevitable downturn comes.

Can the balance sheet withstand severe, temporary adversity?

This seems obvious, but so many people invest in companies without understanding how much money a company holds and who they owe money to. Economic cycles are guaranteed. You must ensure that the company has enough cash-on-hand to avoid becoming obsolete when activity slows.

Will the company benefit from long-term trends?

Make sure the company will remain relevant into the future. If the stock is cheap now, it may be cheap for a reason.

Is the company enjoying profitable growth?

Not growth at all costs, but a combination of sustainable growth and value. All this information can be found online at sites like stratosphere.io.

What are the risk factors?

Is the company trying something new and untested? If yes, who are its competitors and how successful are they? If other players are more established, this company may have a tough time breaking into the market.

Advertisement

News

Community College TY students become qualified baristas

School Dayz Transition Year students at Killarney Community College spent last Tuesday learning the skills to become baristas. They completed a full-day training course and are now qualified to make […]

Published

on

School Dayz

Transition Year students at Killarney Community College spent last Tuesday learning the skills to become baristas.

They completed a full-day training course and are now qualified to make coffee, which could make them very employable in local cafes and restaurants this summer.
Their teachers, who are described as the school’s “resident coffee experts,” were impressed with the students’ hard work and enjoyed the lattes, cappuccinos, and Americanos the students made throughout the day.
In addition to their barista training, the TY students also took a trip to Mallow. There, they learned about the rules of the road, practiced the driver theory test, and many got behind the wheel of a car for the first time. They also learned about the dangers of speeding and driving under the influence of alcohol and drugs.

Continue Reading

News

Rising stars Amano and Lillie Foley to share stage in ANAM

Two of Killarney’s rising musical talents, Amano and Lillie Foley, are set to perform their first ever joint headline concert at the ANAM Cultural Centre. Singer-songwriter and sean nós singer […]

Published

on

Two of Killarney’s rising musical talents, Amano and Lillie Foley, are set to perform their first ever joint headline concert at the ANAM Cultural Centre.

Singer-songwriter and sean nós singer Amano will bring her ‘Mythilligocial Meitheal Tour’ home for a special live performance of both her contemporary and traditional music.

Joining her on the night is local rising star Lillie Foley, making it a special event to celebrate two young Killarney songwriters making their mark on the Irish music scene. The event is supported by Kerry County Council Arts Office.

Amano, described by Hot Press in 2024 as an “idiosyncratic talent” is comfortable performing in both English and Irish, draws influences from alt-folk, R&B, and traditional sean-nós singing.

Her project THREAD was nominated for Irish language Album and Song of the year at the Gradaim Nós in 2024.

Her recent singles, ‘Burn’ and ‘The Birthing House’, have received airplay on RTÉ Radio 1, Radio Kerry, and Raidió na Life.

Lillie Foley, a 22-year-old singer who recently graduated from the Irish World Academy of Music and Dance with a BA in Voice, has released two debut singles in 2025, ‘Someday’ and ‘That’s Life’, which blend pop, soul, and folk genres.

The event is supported by Kerry County Council Arts Office.

The concert will take place on May 23, at the ANAM Cultural Centre in Killarney, starting at 7:00pm. Tickets are available from €15 plus a booking fee on Ticketpass.org.

Continue Reading