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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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Ballymac Vintage Club raises over €7k for local charities

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Ballymac Vintage Club raises over €7k for local charities


The Ballymac Vintage Club raised over €7,000 for two worthy causes following the 16th running of its annual Classic Car and Honda 50 Run over the bank holiday weekend.


Despite a wet start to Sunday morning, more than 100 registered vehicles turned out at Ó Riada’s Bar and Restaurant. Entrants brought a diverse selection of classic cars, vans, and campers, including several vehicles making their first appearance at a Kerry vintage event.
The day began with a Cars and Coffee gathering, allowing participants and spectators to catch up, inspect the vehicles, and enjoy light refreshments.
Proceeds from the event and Saturday’s street collection in Castleisland will support two local causes: St John of God Oileán Beo Castleisland, which provides services for adults with intellectual disabilities, and the Kerry Diocesan Pilgrimage to Lourdes, which supports sick and infirm pilgrims alongside volunteers and medical staff.
A range of spot prizes were awarded throughout the morning, with organisers extending sincere thanks to local donors and main sponsors BG Motors Killarney, Brownes Agri Steel Castleisland, and Ó Riada’s Bar and Restaurant.
The run departed Ballymacelligott shortly after 11am, travelling back roads through Castleisland before making a short stop in Brosna. Drivers then completed the final leg to Knocknagoshel, where refreshments were served by the Knocknagoshel Meals on Wheels team.

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Dromhall team takes top spot at Crokes Golf Classic

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The annual Dr Crokes GAA Club Golf Classic proved to be another major success last weekend, drawing 64 teams to Killarney’s Mahony’s Point course over two days of competition.


The Dromhall Hotel team of John Brosnan, Mike Dwyer, Shane Kelly, and Ger O’Meara took first place. Second place went to the O’Carroll Engineering team of Anthony O’Mahony, John O’Driscoll, Derek McAllister, and Michael O’Sullivan.
Third place went to the Quills team (Vincent Casey, Colm O’Brien, Evy O’Brien, and Donie Buckley), while Diarmuid O’Carroll Electrical (Mark O’Carroll, Brian McCarthy, Ben Kelliher, and Luke O’Shea) finished fourth.
Rounding out the top positions were Fexco in fifth (Andrew McCarthy, Ivo O’Sullivan, Ross Brosnan, and Niall O’Shea), Money Maximising Advisors in sixth (John Lenihan, Michael Lenihan, Des McCarthy, and Peter Bellew), and The Gleneagle Hotel in seventh (Patrick O’Donoghue, Mike McAuliffe, Margaret Gill, and T Buckley).
Raffle prize winners on the night were David Cotter (1st), Eugene Browne (2nd), Donal Brosnan (3rd), and Colm Murphy (4th).
The prize presentation took place at Charlie Foley’s Bar on Friday night, with sponsor Colm Foley handing over the honours. Dr Crokes expressed thanks to all who entered teams, sponsored tee boxes, and donated prizes, as well as Colin Finlay and the team at Killarney Golf Club for the superb condition of the course.

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