Post by Fletchsmile on Aug 24, 2015 13:05:22 GMT 7
Markets generally having a tough time everywhere at the moment. When it comes to FTSE and UK my view is I think it's creating a nice buying opportunity. Could well fall further, but UK markets are starting to look attractive at these levels.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
FTSE continues its slide
The UK stock market has continued to fall on Friday morning, taking the FTSE 100 into its ninth day of consecutive falls. Poor Chinese manufacturing data released overnight on Thursday added to the unease already present in the market and pushed stock prices lower. The Greek Prime Minister has also announced snap elections in September which has done nothing to calm nerves.
Mining stocks and oil and gas producers have been pretty badly hit in the recent sell-off. Together these companies account for about a fifth of the FTSE 100, and so their decline has taken its toll on the headline index. Shares in companies with lots of customers in Asia, like Burberry and Unilever have also suffered from fears of a Chinese slowdown, which has also prompted a broader sell-off across the market.
Corrections like the one we are currently witnessing are part and parcel of investing in the stock market. They do of course make things uncomfortable for investors. However it is important to maintain some perspective. The FTSE 100 stands at around the level it was in December of last year, just eight months ago. It is significantly higher than it was five years ago, and in that time investors have benefited from dividends too, taking the total return from the UK stock market over the period to 55%. However, past performance is not a guide to future returns.
The FTSE 100 grabs most of the attention, but is just one part of the UK market, albeit an important one. If you look at medium-sized companies, things have been much better this year. The FTSE 250, an index of mid-cap stocks, is 8% higher than where it started 2015, despite the recent sell-off. Many UK fund managers tend to invest relatively heavily in these medium-sized companies compared to their big blue chip cousins, so investors may find their funds aren’t doing as badly as the newspaper headlines might suggest.
What are the considerations for investors?
Legendary investor Warren Buffett tells us that to be successful in the stock market we should be greedy when others are fearful, and fearful when others are greedy. I think this maxim is worth pondering in the current environment. Stock market corrections present investors with an opportunity to put new money to work in the market at lower prices. No-one knows when this bout of turmoil will end, and the stock market may yet have further to fall in the current shake-out. But when the headlines are full of doom and gloom, long term investors should prick their ears up, because it can be a good time to top up holdings, although volatility should be expected and investors could get back less than they invest.
The outlook for the UK market still looks favourable in our view, with economic growth healthy, but not strong enough to force interest rates upwards too quickly. On many measures the shares of UK companies look reasonable value, and we believe there is scope for the UK market to make significant progress from levels which are around 10% cheaper than three months ago.
www.hl.co.uk/news/articles/ftse-100-closes-at-lowest-level-since-january
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
FTSE continues its slide
The UK stock market has continued to fall on Friday morning, taking the FTSE 100 into its ninth day of consecutive falls. Poor Chinese manufacturing data released overnight on Thursday added to the unease already present in the market and pushed stock prices lower. The Greek Prime Minister has also announced snap elections in September which has done nothing to calm nerves.
Mining stocks and oil and gas producers have been pretty badly hit in the recent sell-off. Together these companies account for about a fifth of the FTSE 100, and so their decline has taken its toll on the headline index. Shares in companies with lots of customers in Asia, like Burberry and Unilever have also suffered from fears of a Chinese slowdown, which has also prompted a broader sell-off across the market.
Corrections like the one we are currently witnessing are part and parcel of investing in the stock market. They do of course make things uncomfortable for investors. However it is important to maintain some perspective. The FTSE 100 stands at around the level it was in December of last year, just eight months ago. It is significantly higher than it was five years ago, and in that time investors have benefited from dividends too, taking the total return from the UK stock market over the period to 55%. However, past performance is not a guide to future returns.
The FTSE 100 grabs most of the attention, but is just one part of the UK market, albeit an important one. If you look at medium-sized companies, things have been much better this year. The FTSE 250, an index of mid-cap stocks, is 8% higher than where it started 2015, despite the recent sell-off. Many UK fund managers tend to invest relatively heavily in these medium-sized companies compared to their big blue chip cousins, so investors may find their funds aren’t doing as badly as the newspaper headlines might suggest.
What are the considerations for investors?
Legendary investor Warren Buffett tells us that to be successful in the stock market we should be greedy when others are fearful, and fearful when others are greedy. I think this maxim is worth pondering in the current environment. Stock market corrections present investors with an opportunity to put new money to work in the market at lower prices. No-one knows when this bout of turmoil will end, and the stock market may yet have further to fall in the current shake-out. But when the headlines are full of doom and gloom, long term investors should prick their ears up, because it can be a good time to top up holdings, although volatility should be expected and investors could get back less than they invest.
The outlook for the UK market still looks favourable in our view, with economic growth healthy, but not strong enough to force interest rates upwards too quickly. On many measures the shares of UK companies look reasonable value, and we believe there is scope for the UK market to make significant progress from levels which are around 10% cheaper than three months ago.
www.hl.co.uk/news/articles/ftse-100-closes-at-lowest-level-since-january
