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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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Ross Castle canal silt removal

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Ross Castle canal silt removal


Fianna Fáil TD for Kerry, Michael Cahill TD, has welcomed confirmation from the Minister for Housing, Local Government and Heritage that the National Parks and Wildlife Service (NPWS) will return to Ross Castle Canal to address the remaining silt once conditions allow.



Deputy Cahill raised the matter directly with the Minister following concerns from local boatmen regarding the significant amount of silt that had been left banked along the edge of the canal after maintenance works. They warned that, if left in place, the silt could simply be washed back into the canal during periods of heavy rainfall undoing the benefits of the recent clearance works.

In response to Deputy Cahill’s Parliamentary Question, the Minister confirmed that the NPWS had already cleared an entrance and exit route at the site when suitable weather and ground conditions allowed the work to proceed. Importantly, the Minister also confirmed that the NPWS will revisit the issue once lake levels reduce and conditions are suitable to facilitate safe access.

He said:

“I raised this issue after being contacted by local boatmen who were concerned that the silt left on the banks of the canal would inevitably be washed back into the watercourse following heavy rainfall. They made the valid point that the material had now been left long enough for aquatic wildlife to return, meaning its removal could proceed without causing unnecessary environmental disturbance.”

“I am pleased to receive confirmation that the NPWS intends to return to the site to complete the work when lake levels fall and conditions are suitable. This is a practical and sensible commitment which recognises both the environmental importance of the area and the need to maintain navigable access.”

Deputy Cahill said Ross Castle Canal is an important amenity and tourism asset within Killarney National Park and that it is essential it is properly maintained for the benefit of visitors, local businesses and the traditional boatmen who use it throughout the year.

“I will continue to engage with the NPWS to ensure these works are completed at the earliest suitable opportunity. Maintaining the canal is important not only for navigation but also for preserving one of Kerry’s most iconic tourism attractions and ensuring it remains accessible for everyone who enjoys Killarney National Park,” Deputy Cahill concluded.

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Free entry for under 18s at Ross Castle

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Free entry for under 18s at Ross Castle


Young people and families can explore Ross Castle free of charge throughout August as part of a national Office of Public Works (OPW) initiative.


The 15th-century stronghold on the shores of Lough Leane will waive admission fees for all visitors under 18 from August 1 to August 31. The scheme aims to make cultural and historic sites more accessible to young people and families during the summer holidays.
Under 18s must be accompanied by an adult. The promotion applies across fee-paying OPW heritage sites nationwide, excluding Kilmainham Gaol and Brú na Bóinne.
Minister of State with responsibility for the Office of Public Works, Kevin “Boxer” Moran, said the initiative offers young people a memorable way to connect with history, nature, and culture over the summer break.

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