Is now the time to buy FTSE 100 shares?

New Year

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of FTSE100 has had a great run, surpassing 1,200 points since early October and breaking the 8,000 barrier for the first time.

It’s up 6.91% in 12 months and up 5.17% this year alone. That’s well below the bar set by U.S. tech stocks during their golden run, but impressive given the many strong headwinds.

Rise of blue-chip stocks

London’s index of top blue chips ignores war in Ukraine, energy shocks, China’s blockade, rising inflation and interest rates. It outperforms most global markets, such as the United States. S&P 500 It has fallen more than 10% in one year. Nasdaq 17.57% decrease.

Enjoying my FTSE 100 recovery. In October, I decided it was too cheap to ignore and loaded up on undervalued stocks.

At that time, buying FTSE 100 shares was very easy. It was full of top stocks with price/earnings multiples of less than 10 and yields between 5% and 9%. But is today still a good time to buy FTSE 100 shares?

Many stocks are better than they were a year ago, but some stocks barely move. barclays During that time, the stock has risen by just 0.69%.Insurance company Legal/General Group It increased by 0.85% over the same period.house builder barratt development 20.47% are crashing. Vodafone is down 22.39%.

This is the benefit of buying individual stocks rather than index trackers. They behave differently and offer investors like me different things at different times.

When stock prices rise, yields automatically fall. This is because it is calculated by dividing the dividend by the stock price. Still, you can find amazing yields on the FTSE 100.

High dividend stocks become cheaper

From the list above, Barclays yield is projected to be 5.7%, covering 3.7x earnings. L&G has a forward yield of 7.91% with 1.7x coverage. Barratt’s forward yield is 7.56%, well covered twice. Vodafone yields 9.1%, but only 1.1x on very thin covers.

Barclays trades at 5.7x, L&G at 7.52x, Barat at 5.4x and Vodafone at 10.2x.

Now is not the time to buy just because stocks are cheap.I may be in a value trap and should examine the company’s accounts carefullyHere you can see how sustainable the company’s profits are, whether it is generating enough cash to cover its dividend and what threats it may face from new market entrants.

I think now might be a good time to buy Barclays, L&G, or Taylor Wimpy, but be wary of Vodafone. dividend aristocrat, I also like the prospect of generating capital growth. Vodafone stock price he went nowhere for 20 years.

I’m not sure where the index goes from here (although I suspect it might tread a bit). I’m not buying a tracker today, but I’m buying his FTSE 100 shares individually.

Add Barclays, L&G and Taylor Wimpey to your wish list.

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