By Michael O’Connor
Stocks have rebounded in recent weeks after a rocky start to the year amid concerns about the Federal Reserve tightening monetary policy to fight inflation and the war in Ukraine.
At the very start of the year, money in the system and record low interest rates meant stocks kept climbing higher despite the brewing of some severe problems.
Evidence of inflation to anyone who fed their families or filled their cars was now beginning to appear in official statistics. Russia had started amassing troops on the Ukrainian border. These factors led to an inevitable market reaction.
In the weeks that followed, market pandemonium ensued. The tech-heavy NASDAQ index fell sharply and entered into a bear market, down 20% from its highs, while the S&P 500 fell 12.5%.
Equity strength returned in March, and the recovery has been nearly as spectacular as the decline that preceded it. The major indices have recouped roughly two-thirds of the losses sustained over the previous two months in a single month.
Despite the late comeback, all three major averages posted their worst quarter since March 2020. The Dow and S&P 500 declined 4.6% and 4.9% respectively, and the Nasdaq dropped more than 9%.
But we are not out of the woods just yet. Volatility is likely to persist.
Hindsight is 2020
It’s easy to look back now once we have experienced a significant run upwards and state that the market was oversold, and this decline was a buying opportunity, but I think that missed the point. It undermines the uncertainty that exists when war is raging and the value of your assets are falling.
The reality is, it’s not how much the market has fallen that scares investors, it’s how much it could fall. Every time the market falls a little, we worry it will fall a lot. It’s human nature.
Me telling you last month that corrections are a regular part of the market function, and we have seen three corrections of 10% or more in just over three years, doesn’t strip out the gnawing thought that this time might be different.
Unfortunately, stock investing isn’t free. Volatility and uncertainty are the mandatory entry fees if you want access to the high returns on offer.
The least satisfying but most prudent action here? Focus on your long-term objectives and forget the rest. There will always be a seemingly justifiable reason to sell, but history has shown that markets prevail.
Volatility is likely to remain, but some sectors will absorb the impact better than others. Exposure to real cash-flow generating assets such as rental real estate is crucial.
Equity exposure should be focused on companies that can pass on rising prices to consumers without much disruption to their net margins. Think consumer staples and utility companies. Even if prices rise, we still need groceries and electricity.
Lastly, oil and energy companies, especially those that do not hedge away their price exposure, seem to be the obvious trade of the day. In recent years, there has been a lot of talk about the stranded asset risk of oil and the environmental consequences that must be considered. Still, without an immediate substitute available, our dependence looks set to linger on over the medium-term.
Top awards for innovative students
By Michelle Crean Killarney students proved that their projects can make a positive impact after being honoured at the Young Social Innovators of the Year Ireland (YSI) Awards. The five […]
By Michelle Crean
Killarney students proved that their projects can make a positive impact after being honoured at the Young Social Innovators of the Year Ireland (YSI) Awards.
The five members of ‘Operation Red’ in St Brigid’s Secondary School were celebrating this week after receiving a national Bronze Award for their project which is raising awareness about the lack of knowledge surrounding menstrual disorders. Their goal is to encourage open discussion on these issues, so no woman ever feels alone. The team will receive a prize bursary of €750, which can be put towards developing their idea and increasing the impact of their innovation.
Young Social Innovators is a non-profit organisation that believes in the power of youth. Its vision is to empower, equip and inspire young people to change the world for good. The girls’ project was one of 34 shortlisted from over 400 YSI groups around Ireland.
“As part of our project we’re in the process of developing resources for the SPHE classes in our school,” Transition Year student Anna Cashman told the Killarney Advertiser.
“We’ll try it here as a pilot project and branch out to other schools.”
She added that plans so far include educating students by putting an information booklet together using HSE and NHS advice.
“It’s important to have the right information as it’s a very under researched issue. We have had a positive response to it.”
Cait Fitzgerald Healy from YSI arrived to the school as a surprise to the group and presented the girls with their trophy towards the end of the online ceremony. There was huge excitement all round! Teacher and mentor Catherine O’Donoghue also received the ‘Let them Shine’ award for her involvement with YSI over the last five years.
MAKE OUR WORLD SAFER AWARD
Picking up the ‘Make Our World Safer Award’, a team from St Brendan’s College was recognised for its ‘One Punch Can Kill’ project, which aims to combat toxic masculinity and raise awareness amongst young men of the seriousness of ‘one punch attacks’.
When researching the issue, the team found that many perpetrators rarely reoffend and the percentage of male-on-male violence in society is extremely high. The group examined the route cause of the issue, which stems from a variety of factors, and wanted to raise awareness that spontaneous and random ‘one punch attacks’ can have serious and life-changing consequences.
Amongst its many actions, the team embarked on media outreach, designed and delivered student workshops, created a poster campaign, held an Anti Violence Week and is currently working on a children’s book in an effort to promote the important message that ‘One Punch Can Kill’.
Pres footballers are in seventh heaven
The St Brigid’s Presentation Second Year footballers were crowned County Junior B champions on Friday last following a superb seven-goal victory over Mercy Mounthawk Tralee in the Ballymac sunshine.
The girls hit the ground running, bagging two quick goals from the boots of Lily O’Shaughnessy and Niamh Cantillon.
The Pres defence was solid and dogged throughout and managed to keep Mounthawk from breaching their goal for the duration. Abby Cronin scored three goals and a point to torment the oppostion and Niamh Cantillon scored a second goal plus a point to keep the Killarney school well in front.
Further scores from Muireann Healy and a final goal from Lara O’Neill gave us a final score of 7-4 to 0-11.
It was an excellent performance from the entire team, including the substitutes who all played their part. Captain Eve Culhane proudly accepted the cup on behalf of the team, and St Brigid’s, at the end of the game and joyous celebrations followed.
Congratulations to all the players and to their trainers: Mr Counihan, Ms Healy and Ms Brosnan.
Top awards for innovative students
By Michelle Crean Killarney students proved that their projects can make a positive impact after being honoured at the Young...
Pres footballers are in seventh heaven
The St Brigid’s Presentation Second Year footballers were crowned County Junior B champions on Friday last following a superb seven-goal...
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