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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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​​Bursaries presented to schools at Lions Club open night

By Michelle Crean Three Killarney schools have been awarded bursaries from a local group. Killarney Lions Club made the presentations to Killarney Community College, St Brigid’s Presentation School and St […]

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By Michelle Crean

Three Killarney schools have been awarded bursaries from a local group.

Killarney Lions Club made the presentations to Killarney Community College, St Brigid’s Presentation School and St Brendan’s College to help support students in need.

It took place at their open night recently in the KDYS Youth Centre.

The night featured different exhibitions about Killarney Lions Club activities such as the Annual Christmas Food Appeal and the Kerry Clubs Fair.

“It was great that people made the effort to come and find out more what Killarney Lions Club does, despite the weather on the night. We are a voluntary group so community support is vital for activities such as our Christmas Food Appeal which will kick off very soon.”

The Killarney Lions Club, through its members, assists various groups and individuals in and around the community. Lions do this through voluntary activities, fundraising and by holding various types of events in support of a great many local causes.

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Staff celebrated for their long service

Stalwarts of the tourism industry in Killarney were delighted to celebrate their long term team members with a gourmet dinner in Great Southern recently. The event was held for all […]

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Stalwarts of the tourism industry in Killarney were delighted to celebrate their long term team members with a gourmet dinner in Great Southern recently.

The event was held for all team members of the Great Southern and Killarney Royal who have over 10 years of service, and was hosted by Michael Jacobi, Managing Director, Hayfield Family Collection and Mark Scally, Financial Controller, Hayfield Family Collection.

32 employees celebrated on the night, with the Great Southern represented by John Fitzgerald with 53 years of service, Martina O’Leary with 44 years of service and Kathleen Bhuiyan with 31 years of service. From Killarney Royal Joseph Hurley celebrated 37 years of service with John Harrington celebrating 32 years and Nuala Doolan celebrating 30 years.

“It is an absolute pleasure for us to celebrate our long term staff members,” event host and Hayfield Family Collection Managing Director, Michael Jacobi, said.

“They have played such an integral part in achieving the high standards we are known to provide and are such familiar welcoming faces for our guests.”

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