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There will always be uncertainty

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There will always be a seemingly justifiable reason to sell, but history has shown that markets prevail.

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497 – Warren Buffet

The truth is, the pending geopolitical events are impossible to predict with certainty. As always, the most practical form of defence against these events is diversification across multiple asset classes, market-cap sizes, regions and sectors.

With that said, it helps to analyse how similar past events have impacted markets.
While international conflict is tragic for all involved, it does not guarantee economic ruin. For example:

During the Korean War (1950 to 1953), US stocks fell at first, then recovered as normality resumed, rising roughly 15%.
During the Vietnam War (1965 to 1973), the stock market grew by 43% as industries in the US rebounded from the initial impact and began rebuilding.
In both Gulf Wars (1990 and 2003), the market fell 10% initially but had recovered within a year.

Market corrections are also nothing new. Remember, stock market losses are a regular occurrence.

Since 1950, the S&P 500 has had an average drawdown from peak-to-trough of 13.6% over a calendar year. And yet, markets have continued to grind higher over time.

Even during the S&P 500's nearly 11-year bull run from March 2009 to February 2020, the S&P 500 witnessed five corrections. The pullbacks were prompted by concerns about everything from interest rates to trade wars to a European debt crisis.

The volatility you get from stocks is the price you pay for the high returns they offer. It's not free.

MARKET MOVERS

Defence stocks, commodities, especially oil and precious metal such as Gold will likely move higher while growth and transport stocks are likely to be negatively impacted over the short-term.

For now, all eyes will be on oil movements. Russia’s outsized role as an oil and gas exporter makes this an area of extreme focus, given the inflationary impact that rising oil prices will have on the broader economy.

NEXT STEPS FOR INVESTORS

Through the clarity of hindsight, all past declines look like opportunities but saying "I'll be greedy when others are fearful" is easier said than done.

When the chips are down and war is looming, it's suddenly much harder to confidently swing for the fences.

Unfortunately, it is impossible to know precisely when this all ends, especially with Putin at the helm.

History has shown that military attacks typically result in initial sharp market drawdowns followed by a rebound - but attempting to pinpoint this reversal is a dangerous game.

From here, investors need to ensure they focus on their medium to long-term view. Concentrating on your individual investment goals and the earnings of the companies you hold will help strip out some of the uncertainty from the market.

To read my full market analysis, go to www.theislandinvestor.com.

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Rodeo lasso demo to kickstart 4th of July Festival on Friday

Killarney’s 4th of July celebrations will get underway today (Friday) when the Tucson Arizona Boys Chorus put on an unusual show at St Mary’s Church of the Sloes. The choir […]

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Killarney’s 4th of July celebrations will get underway today (Friday) when the Tucson Arizona Boys Chorus put on an unusual show at St Mary’s Church of the Sloes.

The choir is due to perform a concert in the town centre church on Friday evening..

However part of their act is a demonstration in the art of lasso ropes – a tradition that stems from the early farming days of the Wild West – and there isn’t enough room in the church for that element of their act.

Instead they will give a lasso demonstration on the grounds of St Mary’s from 5pm Friday.

“They are showcasing on the green space outside our church at 5pm,” the Venerable Simon J Lumby the Rector of Killarney said.

“They will perform rodeo lasso stunts as part of their act. We couldn’t accommodate that during the concert so we’ve got them to do it earlier outside.”

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GAA stars set to gather for A Night With Legends

By Sean Moriarty Over 1,500 people are expected to attend Fossa GAA Club’s ‘A Night With Legends’ on Tuesday night. GAA royalty will grace the INEC stage as part of […]

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By Sean Moriarty

Over 1,500 people are expected to attend Fossa GAA Club’s ‘A Night With Legends’ on Tuesday night.

GAA royalty will grace the INEC stage as part of an ambitious fundraiser by the club.

The event will be styled on RTÉ’s popular pre All-Ireland Final show ‘Up for the Match’ where footballing legends will tell some of their life stories in between music and songs.

It will be hosted by author and raconteur Billy Keane and horseracing photographer Pat Healy. The event is one of the key fundraisers for the expanding Fossa GAA Club.

Coming just days before Kerry’s All-Ireland semi-final with Dublin, ‘A Night With Legends’ will also serve as a light-hearted preview to the important game.

Kerry greats like Pat Spillane, Mike Frank Russell, Paul Galvin and Eamon Fitzmaurice will be joined on stage by Dublin hero Bernard Brogan Sr. Killarney greats Colm ‘Gooch’ Cooper and Ambrose O’Donovan will also be there.

“This is not going to be a boring night, it is going to be filled with fun and banter, music and craic,” Fossa GAA chairman, Dermot Clifford, told the Killarney Advertiser.

Several raffle and auction prizes are up for grabs on the night too, the most unusual being a chance to bid on a racing greyhound, donated by the Murphy Family from Brosna.

The fundraiser has already raised €10,000 thanks to a recent auction organised by Paul Nagle. The local rally star sold one of his world championship helmets for €25,000 with the balance going to Recovery Haven in Tralee.

Limited tickets are still available at a cost of €25 per person or groups can buy a table of 12 for €250.

Ticket enquires: nightoflegends2022@gmail.com.

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