The S&P 500's steady climb higher was interrupted last week, reversing course to fall nearly 2%. The biggest weekly drop since February.
The Federal Reserve acted as the catalyst for this latest bout of volatility. Last Wednesday, the FED issued a revised outlook, signalling that interest rates are set to increase sooner than previously projected due to higher inflation forecasts.
While this FED adjustment resulted in a momentary pull back, market participants quickly reverted to their default setting of unwavering optimism, with the market hitting new all-time highs just five days later.
While unrelenting positivity is enough to sustain the current investing eutopia, history suggests that volatility will return at some point in the future. So instead of basking in the glory of your unrealized gains, use these periods of low volatility to prepare. Diversify, take profits on certain stocks that have notably appreciated and implement some downside protection.
Has the rotation into 'Value' run its course?
So-called value stocks, expected to benefit from the economic recovery, have outperformed in 2021, but this rotation trade has been out of favour in recent weeks.
Growth stocks, including the major tech names like Apple and Microsoft, have rallied since the Fed announced a slightly more aggressive stance on future rate hikes last week. The S&P growth index has added almost 2% since the announcement, compared with a drop of nearly 2% in the value index.
With the S&P Value index up 13% year-to-date, much of the re-opening trade has arguably been priced in the market. With that said, specific sectors such as energy and financials may still have room to run.
Cryptos pulled back once again as China continues its clampdown on miners and the Crypto space as a whole. The recent volatility has wiped out all of bitcoins 2021 profits, with Bitcoin briefly falling below 30,000 a coin. The cryptocurrency has now lost more than 50% from its mid-April highs of almost $65,000.
Commodities like copper slumped last week while Lumber recorded its worst week in history, falling 18%. Higher commodity prices have played a pivotal role in the recent inflation jump. This pullback in commodity prices suggests that the supply chain bottlenecks may be clearing in certain sectors of the economy. From a global perspective, the 're-opening' is still in its infancy, but these price adjustments suggest the inflation we are currently experiencing is, in fact, transient in nature.
Cost of agricultural land set to increase by 8% this year
By Ted Healy of DNG TED HEALY The results of a survey on agricultural land values conducted by the Society of Chartered Surveyors Ireland (SCSI) was published earlier this week. […]
By Ted Healy of DNG TED HEALY
The results of a survey on agricultural land values conducted by the Society of Chartered Surveyors Ireland (SCSI) was published earlier this week.
It predicts an increase in land values by an average of 8% this year and an increase of 14% on average in rental values.
The report titled, ‘SCSI/Teagasc Agricultural Land Market Review & Outlook Report 2023’, analyses the agri sector performance over the past year and projects how it will perform over the next 12 months.
In all 134 agri professionals and valuers were surveyed, who expect the outlook for dairy farmers to ease and a challenging future for sheep and tillage farming.
Rental Land values in Munster increased by an average of 13% in the last year with a 9% increase experienced in Leinster.
The report indicates that the average non-residential farmland prices in 2022 ranged from €5,564 per acre for poor quality land – up five percent from €5,308 in 2021 – to €11,172 per acre for good quality land – up two percent from €10,962 the previous year. Strong demand from dairy farmers for good quality land is driving the market.
The majority of those surveyed believe there is likely to be an increase in demand from dairy farmers to purchase farmland in 2023.
One point to note however, is that changes to the European Nitrates Directive, particularly measures aimed at protecting water quality, may have an impact on land prices, especially rental prices.
In order to maintain current levels of milk production – and to comply with the directive – many dairy farms will need to either increase their land area or reduce milk production.
The Residential Zoned Land Tax (RZLT) is also coming down the line at an alarming rate, farmers have until May 1 to make a written appeal. Under the new legislation farmers owning currently zoned land face an annual tax bill of 3% of the market value of their zoned land.
This will result in countless numbers of landowners facing crippling tax bills from next year on. It is expected that this new tax may bring forward extra land sales later this year before the tax takes hold.
The IFA (Irish Farmers Association) have this week sought a senior counsel review of the legislation governing the Residential Zoned Land Tax.
What is a Fire Safety Certificate?
By John Healy of Healy Insurances A Fire Safety Certificate is an official document that verifies if a building design submitted as part of an application will, if constructed in […]
By John Healy of Healy Insurances
A Fire Safety Certificate is an official document that verifies if a building design submitted as part of an application will, if constructed in accordance with the plans and specifications approved by the Building Control Authority, comply with the requirements of the Building Regulations.
Fire Safety Certificates are issued by a Building Control Authority. The certificate confirms that the building has adequate escape facilities and that the building is designed in a way that prevents and limits the spread of fire. While all buildings must comply with the fire regulations, not all buildings will need a Fire Safety Certificate.
Which developments require a Fire Safety Certificate?
The Building Control Act (1990 & 2007) specifies the development types that require Fire Safety Certificates:
· Works in connection with the design and construction of a new building
· Works in connection with the material alteration of a day centre, a building containing a flat, a hotel, hostel or guest building, an institutional building, a place of assembly, a shopping centre
· Works in connection with the material alteration of a shop, office or industrial building where additional floor area is being provided within the existing building or where the building is being sub-divided into a number of units for separate occupancy
· Works in connection with the extension of a building by more than 25 square metres
· A building as regards which a material change of use takes place.
Some developments are exempted from requiring a Fire Certificate and can include:
· Certain single storey agricultural buildings
· A building used as a dwelling (other than a flat)
· A single storey domestic garage
· A single storey building ancillary to a dwelling which is used exclusively for recreational or storage purposes or the keeping of plants, birds or animals for domestic purposes and is not used for any trade or business or for human habitation
· Works in connection with a Garda station, a courthouse, a barracks and certain government buildings.
If a building is inspected by a member of the building control authority and it transpired that no Fire Safety Certificate is in place, the building could be subject to closure. For more information see www.kerrycoco.ie/home3/building-control/firesafetycerts.
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