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Pandemic policy changes have left us with skewed data figures

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By Michael O’Connor

They say history doesn’t repeat itself, but it often rhymes - at this point however, even the rhyming has stopped.

The pandemic policy changes have left us with skewed data figures, manipulated comp stats and a remarkably unfamiliar backdrop resulting in immeasurable uncertainty amongst investors across the globe.

During times like this, it is best to break complex problems down to their simplest forms and concentrate solely on the most crucial variables.

And the most crucial variables in this case are inflation and Fed policy.

An infinite number of potential outcomes are possible over the coming months, but all will be derived based on the aggressiveness of future Fed adjustments and the persistence of inflation.

There will always be risk

There is no perfect scenario here. The inflation we are experiencing is the by-product of an overheating economy.

The cumulative net worth of US Households is now almost $150 Trillion, $80 Trillion more than it was 10 years ago. The US labour market currently boasts two jobs for every one person looking for work, and corporate earnings jumped 35% in 2021, the largest increase since 1950.

Simply put, there is more money in the system than ever before.

The supply side issues have been well documented, but if inflation is to be quelled, then the demand side of the equation needs to be solved.

This is where the Fed’s tightening cycle comes in.

The Fed cannot improve supply issues, but they can negatively impact demand by dampening the labour market and decreasing the amount of capital in the systems through higher interest rates.

This tighter monetary policy is expected to bring inflation under control, but as the Fed increases the speed of rate hikes, the odds of economic contraction also increase.

In short, the goldilocks scenario of a gradual decline in inflation while maintaining labour market strength, household wealth and corporate profits, remains a pipe dream.

To strip inflation out of the system, a period of economic contraction is a necessary evil.

Crucially, this contraction does not need to lead to a crippling recession or anything of the sort. The level of contraction we experience will depend solely on the Fed’s ability to strike a balance between cooling inflation and maintaining demand.

Only time will tell if they can successfully thread the needle.

Jumping back in

Before declaring an all-clear for stocks, investors need to believe we are at the peak of policy tightening and inflationary pressure.

Certainly, we are seeing signs of improvement from an inflationary standpoint. For example, wheat prices are now lower than at the beginning of the war in Ukraine - another showcase of the unpredictability of markets.

With that said, one crucial paradox remains. Investors want interest rates to fall so stocks can rise, but any fall in interest rates is unlikely if stocks rally, somewhat capping the recent upside.

Make a plan

As always, I encourage a long-term focus. Investors will be better served focusing on the bull market opportunity on the other side rather than overemphasising what may be left in the bear market.

Those looking to take advantage of any potential upside need to get their house in order. You need to take the time to develop a clear picture of what your allocation will look like, create a watchlist of preferred names and know your entry points.

Scrambling together a plan after the fact is a sure-fire way to ensure you miss the very opportunity you were trying to capture.

Learn more at

https://www.theislandinvestor.com/

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Last chance to enter Spa GAA’s fundraising draw

By Sean Moriarty There is just less than one week left to enter Spa GAA’s fundraising raffle. The ‘Cairde Spa’ draw takes place on Thursday night (February 2) the Spa’s […]

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By Sean Moriarty

There is just less than one week left to enter Spa GAA’s fundraising raffle.

The ‘Cairde Spa’ draw takes place on Thursday night (February 2) the Spa’s clubhouse at 7pm.

Funds raised will go towards the upgrade and development works planned over the next few years.

Guest of honour on the night is national GAA president Larry McCarthy and the Sam Maguire Cup will make an appearance too.

“Apart from ongoing and essential maintenance work, the club has a number of development projects in the pipeline. The money is being raised towards improving our grounds to provide top class facilities that can be used year-round, including car parking, perimeter fencing for pitches, ladies and juveniles dressing rooms, outdoor skills wall, player dug outs for senior and juvenile pitches, safety enhancements and lighting on the walking track, landscaping, scoreboard, viewing gallery to the sports hall, alignment of entrance to the grounds and a remembrance garden,” said Michael Cronin, Club Chairman.

“We are calling on everyone to get behind the fundraiser. Our vision is to provide top class grounds and facilities where everyone is welcome to use and participate fully in our activities, games and culture. In order to achieve this vision, we are setting out exciting new developments and investments in our facilities – and we need your support.”

There are 10 prizes up for grabs: 1st Prize: €15,000, 2nd Prize: €3,000, 3rd Prize: €2,000, 4th Prize: €1,000, 5th Prize: Two nights dinner and B&B at the Killarney Park Hotel, 6th Prize: €500 Voucher for Killarney Carpets & Furniture, 7th Prize: €300 Voucher for O’Sullivan’s Cycles, 8th Prize: €250 Voucher for Killarney Oils, 9th Prize: €150 Voucher for Killarney Hardware and 10th Prize: A signed Kerry jersey.

Tickets are €100 each and can be collected/returned at the clubhouse this Saturday (10.30am-12noon), Monday (7-8pm) or Wednesday (7-8pm), and tickets are also available online on spagaa.com.

Any queries contact Andy (087 2236754), Michael (085 8213027), Assumpta (087 6779292) or Deirdre (085 1216359) or any Club Officers.

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Marian Players excited to get back on stage

By Michelle Crean With a cast of over 50 it’s no small undertaking – but that won’t deter one panto group who are only too happy to get back on […]

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By Michelle Crean

With a cast of over 50 it’s no small undertaking – but that won’t deter one panto group who are only too happy to get back on stage this weekend.

It’s been two years since they staged a show due to COVID but the Marian Players Rathmore are rearing to go tomorrow night (Saturday) with their hilarious show ‘Dame Annie Goes West’.

A medley of comedy and colour, combined with music and dance, locals from both sides of the border have been working together to make it a great production.

“We’re very excited, we can’t wait! It’s great to be back,” Mary Hickey told the Killarney Advertiser.

“They [the cast] got together in October and they’re at it since.”

Val Moynihan is the “genius behind it”, she added, and it’s produced by her son Brian Hickey, and co-written with Eilish Coakley.

She said that they have loads working in the background also doing the stage curtains, lighting and making costumes amongst other tasks.

“It’s a pantomime without the pantomime in the background! It’s a whole community effort both sides of the border.”

Evening shows start at 7.30pm tomorrow (Saturday) and again Sunday (January 29) at 3pm.

Mid-week shows continue on Wednesday next (February 1) at 7.30pm, Thursday (February 2) at 7.30pm and also Saturday (February 4) at 7.30pm and Sunday (February 5) at 3pm.

The booking office (085 2031730) will be open every day from 2pm to 6pm to reserve seats and collect tickets and is located adjacent to the community centre, next to Christy’s Take Away.

Seats may be reserved over the phone too and paid for using a bank card. All proceeds are going to Kerry Parents & Friends Association.

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