Property & Finance
Good times don’t last forever
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.
Benefit-In-Kind tax rules overturned for company cars
By John Healy of Healy Insurances Minister for Finance Michael McGrath has announced a temporary change for company-owned vehicles following a backlash from drivers whose Benefit-In-Kind (BIK) taxes increased substantially […]
By John Healy of Healy Insurances
Minister for Finance Michael McGrath has announced a temporary change for company-owned vehicles following a backlash from drivers whose Benefit-In-Kind (BIK) taxes increased substantially in January.
While the move to a CO2 based Benefit-In-Kind system, which incentivises the use of Electric Vehicles and lower emission cars, a significant number of employees with vehicles in the typical emissions range experienced large increases in their income tax liabilities since the start of 2023.
To address the issue, the Finance Minister has introduced a relief of €10,000 to be applied to the Original Market Value (OMV) of cars in Category A-D in order to reduce the amount of Benefit-In-Kind payable (this is not applicable to cars in Category E).
In effect, this means that, for the purposes of calculating BIK liability, employers may reduce the OMV by €10,000. This treatment will also apply to all vans and electric vehicles. For electric vehicles, the OMV deduction of €10,000 will be in addition to the existing relief of €35,000 that is currently available for EVs, meaning that the total relief for 2023 will be €45,000.
The upper limit in the highest mileage band is amended by way of a 4,000km reduction, so that the highest mileage band is now entered into at 48,001km.
These temporary measures will be retrospectively applied from 1 January 2023 and will remain in place until 31 December 2023. It is proposed to introduce the measures at Committee Stage of the Finance Bill 2023.
From an insurance perspective, if a vehicle is owned by a company then the motor policy in place must be in the company name and have full business use cover known as Class 2 cover. It is customary that the policy is on an open driving basis, usually aged 25 to 70. The cost for a company owned car policy can be higher than privately owned vehicles.
Reduce the stress of downsizing
By Ted Healy of DNG TED HEALY It is widely accepted that moving house is one of THE most stressful life events one will experience, but does it really need […]
By Ted Healy of DNG TED HEALY
It is widely accepted that moving house is one of THE most stressful life events one will experience, but does it really need to be?
Embrace the change and look forward to new beginnings.
One particular cohort of home movers are those downsizing from their larger family homes, perhaps to a more manageable property with little/less maintenance. Here we look at potential ways of reducing the stress involved when downsizing:
Start the process as early as possible. Putting it off will add to the stress and result in a rushed job that is maybe not thorough enough. You only want to bring items you LOVE, NEED, USE and have SPACE for to your new property. Use this time as an opportunity to declutter – be ruthless. This is a fantastic opportunity to put some organisation into your life. Perhaps declutter prior to placing your existing home on the market – it may well add value to your home.
Don’t underestimate how much of a reduction is required pre-move. If the new property you are moving to is 50% smaller, then a quick estimate is that 50% of items in your current home need to be rehoused elsewhere.
Have an exit plan for the items leaving your home. Where are your local charity shops, do they offer a collection service? Is a skip required? A carefully planned exit strategy will make the move a lot more seemless. Have detailed measurements of your new home so you know which larger furniture items will/will not fit in your new property.
Take your time and do not try to do multiple areas simultaneously. Perhaps take it room by room and set yourself realistic targets.
Most importantly don’t panic. Allow yourself sufficient time, have a well-planned system in place and do not be reluctant to ask for help. Involving family members and relatives in the move will make the whole process a lot easier.
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