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Historically FTSE is large, high dividend, rather old industries.....oil, mining, banks, insurers etc. Europe pays less yield. USA has high component new tech stocks.....FTSE hit as most stocks out of fashion and/or cut divis. PLUS, Brexit does weigh on our market. Whatever your view, get Brexit out of the way, Covid will pass or be accommodated, divis will come back and the FTSE will come back; alway have diversified portfolios....both in stocks and continents.
Could explain why over last 12 months the DJ is down by a shade over 2% whilst the FTSE 100 is down nearly 24%, and the 250, down 14.4%
Elkarter,
VG points. Far too much inconsistency from UK's government over recent few months. That creates lasting uncertainties which damages confidence across the economy. Such negativity has filtered into UK's markets. Hence the seriously huge outflows of investment cash out of FTSE 100.
Much comes down to the clarity of guidance from leadership. Whatever we feel about Trump, his policies have consistently placed US economic interests first. The FED have supported that. All US investors know where they stand & after next week's US election, even if Biden wins, I think US markets will probably recover quite well, helped by another stimulus package.
The UK? I no longer have much confidence in the dithering Johnson or Sunak, though I suspect the latter is going along with policies he largely disagrees with. It'll be a long road to recovery for many UK stocks besides BP. - ATB.
@jack
Indeed sir. Additionally the US is more willing to enact favourable monetary and fiscal policy such as the rampant QE that has taken place since March. We’ve had the CBILS loans, furlough and low interest rates which do help but this is negated by the constant, looming threat of lockdowns and business closures. US have hit record numbers of Covid cases and there’s seemingly no talk about any lockdowns
PS: I know UKX briefly hit below 4900 in March when we went into nationwide lockdown, but back then they were predicting worst-case scenarios & huge loss of life. Later that was seen as an over reaction. Hence by mid-May UKX was back over 6000. Now we know that relatively few people die from COVID-19, there seems no need to trash the economy again. - Cheers.
Elkarter,
Very true. The anomaly is that whilst indexes like the DOW are down about 2000 points from January, when it was high anyway, percentage-wise it's lost little & is still far higher than when Trump too over.
FTSE 100 has dropped FAR more in relative terms, having started January at over 7600. It's already hit lows today of 5525+. That's a percentage loss of well over 30% across UK's main stock market in little over 6 months. Decades of gains lost!
Time that Bailey of the BoE pulled his finger out & supported markets instead of waiting for the US to always take the lead. So far, he's looked like another clueless time-waster like Carney. - GL.
@jack
I agree with your views on the FTSE. Largely a dog sheet index. Arguably because as a country, we don’t care about our stock market, it’s more of a niche thing whereas the s&p and Dow are greatly watched and cared for by both American investors and policy makers alike.
Ben, I remember buying into BP in the early 1990s ('91 or possibly '92) at a price of 223p. I sold out a year or so later at 323p, making exactly 1 pound a share (I had bought 3,000 shares - I was young and thought I was the next WB!). The reason I mention this is that (despite what has happened since) we appear to be near a 30 year low. This is screaming "buy me!!", even if only for the dividend (forget the capital gain). My entry point will be 1.80p (should it happen). But that will be the absolute bottom, surely??
HappyInvestor,
I echo your comment at 14.09. If Corbyn had won the GE, I imagine few of us would have been mad enough to stake hard-earned cash in the FTSE. Sadly, what we have in Johnson's government seems at times little better. Dithering U-turns & damaging lockdowns with signals of more to come, rather than give added protections for the most vulnerable people. Meantime, record levels of debt continue piling up, increasing job losses, many people left much poorer & no doubt years of higher taxation to repay it.
The damage from all these lockdowns, including delayed medical interventions for other serious conditions, will also have exact a high price & cost lives. Where's the logic? Total shambles! - GL.
Ben,
About 28 year lows speaks volumes for what's happening globally. But then look at what a disgustingly weak index the FTSE 100 is. About 50% garbage!
When US saw successive record highs & other top indexes did well, FTSE 100 failed to follow. Now that previously stimulus-pumped & well overbought US markets sell off, this rubbish index of course follows, taking down quality stocks & all. UKX nearly 200 points down as I write. - GL.
I hear BP's SP is soon to be number 1 attraction at 'Ripley's Believe It or Not!'
cant believe this share is now at 28 year low.
@Happyinvestor
‘ I’m no drama queen or want the economy to shut down’
was in the body of my post!
Leas
I, too, lost a good friend to COVID-19 recently who did have underlying health conditions. I was deeply saddened and moved by his untimely death and I certainly did not intend to belittle the seriousness of the virus.
However, we have overcome two world wars and many calamities over centuries. Not once did we seek to shut industry the way we are now doing. We risk destroying the very fabric of our capitalist system that has given us such great prosperity and enabled excellent healthcare and longevity.
We should take sensible precautions including wearing masks and socially distancing, where possible. The vulnerable should also shield, where feasible, and be supported by the state. But the healthy need be able to go about their business and, by so doing, support our economy and way of life.
This madness of lockdowns and tiers and switching lockdowns on/off like a tap needs to end.
leas, not too unlike Trump, people easily dismiss Covid until that is .... it arrives on their doorstep.
Keep safe.
As for BP .... the insanity continues.
atb
@tacet
You can argue about the semantics surrounding the virus but it’s very real. People have died and will continue to die. Some deaths are preventable and some aren’t so lockdown debates etc are welcomed but asking for proof is incredibly disingenuous
Those topping up should have waited until the US market opens. Futures looking bleak
appleby
You are not wrong but I have never lost 2 good friends to flu in the last 2 weeks. Non had any underlying health conditions and both were under 60.
My good friend who died on Sunday morning joined me on a 10k run 3 weeks ago and fitted a kitchen for his daughter on the Thursday, 3 days before he succumbed to the virus.
I’m no drama queen or want the economy to shut down but this is my experience of the virus and dismissing it as seasonal flu is naive.
I hope your view isn’t changed with the loss of a close friend or family member.
How much lower can this share go. Imagine the profit be made if purchased at current price and kept for 1 year.
Thousands of people die of flue every year ask any doctor .
Here is a question for happyinvestor and all those that say this virus is survived by 99.9% of people.
Why is it that in my whole lifetime I've never heard of anyone die or be seriously effected to the point of intensive care or being wheel chaired by having a cold or flu, yet this year I know 7 people who've died and half a dozen who have long term effects because of Covid-19.
Would you really say to the families who've lost loved ones that this virus they died of wasn't actually deadly, or perhaps it's really part of some conspiracy ?
If so it would be like admitting you're some sort of internet sheep hooked in by articles or movies usually only produced to attract advertising revenue or notoriety.
In any case there is no scientific or realistic background to that 99.9% figure. A simple piece of division on the widely obtainable figures capable by a 10 year old will get you the death rate results which can then be used to obtain a mean, and it is not 0.1%.
This will be £4+ once the covid rubbish is over. invest what you can at prices like this & throw it in the drawer for a few years. Patience & no panic that is all that is needed!
Ditto. Have add3d a bit more but cash is low so sadly need to wait until this panicking stops and some sense returns to markets. Hopefully we should get an approved vaccine in a month and that will calm nerves. Until then just need to patiently wait and keep ignoring how in the red my portfolio is!
Happy100
I agree on not going for 100% lock downs. To correct your statement the mortality rate on Covid-19 depending on demographics in any given population is 0.8% for the UK in first wave. Second wave should be 0.4% if health services use appropriate treatments. The mortality rate of influenza is 0.09-0.17% so its 2.5 times worse than the flu in UK. The mortality rate of non-Covid 19 health causes that are neglected as a result of a lockdown and not having adequate access or mental health mortalities is around 20,000 access deaths in the UK which is equivalent to those lost in an average influenza outbreak. So the net benefit is actually less than 0.06% on mortality. Far better to have a good advert campaign to keep everybody making best efforts not to spread.
...a small top-up because I am running out of available cash :-(
My logic is simple. If BP and RDSB fail (and the market is now pricing in Armageddon scenarios) then Western Capitalist civilisation will have collapsed and the price of my stocks will be the last thing I need to worry about.
However, I think politicians will soon realise that we can't keep shutting down entire economies to combat a virus which does not kill 99.9% of those infected.
That realisation is dawning...