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Five questions to ask yourself before buying a stock

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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.

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Killarney exhibition and lecture on foundations of Fianna Fáil

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A widely acclaimed exhibition on the origins and early years of Fianna Fáil in Kerry will opened at Killarney Library on Tuesday for a three-week period and will coincide with a free public lecture on the subject at the library on March 26.


This year marks the centenary of the foundation of the party in 1926 and the exhibition, presented by historian Owen O’Shea, focuses on how the party developed and grew in Kerry in the late 1920s and early 1930s.

The exhibition is called “Soldiers of Destiny, Fianna Fáil in Kerry 1926-1933” and is supported by a Commemorations Bursary from the Royal Irish Academy.

It was officially opened by An Taoiseach Micheál Martin recently at Tralee Library. Mr Martin said the exhibition “has provided a deep insight into the foundations and rapid growth of one of democratic Europe’s most successful political parties.”

Owen will deliver a talk on the same subject on Thursday, 26 March at Killarney Library at 7pm as part of the programme of lectures from the Kerry Archaeological and Historical Society. The lecture is free and open to members of the public.

“The foundation of Fianna Fáil 100 years ago was a transformative moment in Irish politics and represented a new phase of Civil War politics in Ireland.

In this, its centenary year, I am presenting the story of the party in Kerry where its organisational and electoral successes were without parallel in this period,” said Owen O’Shea.

“Éamon de Valera’s party set about establishing a network of branches in Kerry with enormous speed and the Fianna Fáil vote in the constituency grew rapidly from 33% in 1927 to 68% in 1933.”


The seven TDs who represented Kerry during those years were Denis Daly, Fred Crowley, Tom McEllistrim, William O’Leary, Thomas O’Reilly and Jack Flynn.

Their stories are being shared for the first time as are many of the election posters and political material from the time.


“I am very grateful to the Royal Irish Academy for funding this exhibition and I hope it will attract anyone with an interest in Irish history and politics,” he added. It will be open at Killarney Library during library opening hours until March 31.

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Resident hits out at “sticking plaster” spend on Listry Bridge

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A Listry resident has slammed Kerry County Council’s latest safety funding for Listry Bridge, labelling the repeated small-scale spending as “insanity.”

The criticism from Brendan O’Shea follows last week’s announcement that €100,000 has been allocated for interim safety measures at the notorious bottleneck.

The Council confirmed the funds will cover a reduced speed limit, upgraded signage, new road linings, extended anti-skid surfacing, and parapet repairs.


However, Mr O’Shea, a long-time campaigner for safety improvements at the site, argues that these measures fail to address the core issue: that the bridge remains the only point between Killarney and Dingle where two cars cannot pass.


“The definition of insanity is doing the same thing over and over again and expecting a different result,” Mr O’Shea said. “Over the years there have been announcements of funding of €30k, €50k, €80k, €100k on a number of occasions, €250k one time before an election, and the latest is another €100k. Each and every time, it’s for new signage, anti-skid surfacing, and repairs.”


He pointed out that the Council has encouraged significant residential development in Milltown, leading to a major increase in daily commuters using the bridge to reach Killarney.


Mr O’Shea also questioned the county’s infrastructure priorities, contrasting the lack of a bridge replacement with the €7 million refurbishment of Ashe Hall in Tralee.

He suggested that Killarney is being left behind in terms of major projects compared to neighbouring counties.


“If the Killarney bypass eventually gets completed, then perhaps we’ll have a few euro left over to replace Listry bridge. Let’s stop with the ridiculous sticking plaster spending in the meantime,” he added.


The Council maintains that the current €100,000 spend is necessary for “interim safety measures” to manage traffic flow and improve grip on the approaches to the bridge.

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