Sunday, 3 August 2014

Could this be the crash we have all been waiting for?

A World Of Worry
There are plenty of reasons for stock markets to fall. The Ukraine crisis is intensifying, as the US and Europe sharpen up their sanctions. The eurozone is sliding ever closer to deflation, and today's manufacturing data disappointed (again). Argentina is in default. The IMF has been warning of a China bubble. The Middle East horrorshow is plunging new depths.

In May, the FTSE 100 hit a peak of 6866. Right now, it trades at a three-and-a-half month low of 6644, some 3.2% off its peak.
That isn't a crash, yet.
But it still makes today a marginally more tempting to buy, say, a FTSE 100 tracker, as you are getting 3.2% more stock for your money.
And there could be more discounts to follow.
But the biggest bargains can be found in individual company stocks.

Big Names, Big Discounts
If you like buying stocks at bargain prices, today's wobbles have tossed up a host of big names at low prices.
Barclays (LSE: BARC) has seen its share price has fall nearly 25% to 225p since January. A string of scandals and regulatory investigations, falling investment banking profits, and the wider economic uncertainty have all dented confidence, but today's discount looks a great time to buy.
At 479p, oil major BP (LSE: BP) is down nearly 9% since late June, as its 20% stake in Kremlin-owned Russian oil company Rosneft leaves it more exposed to US and European sanctions than any other British company.
Two other FTSE 100 stalwarts, GlaxoSmithKline (LSE: GSK) and Tesco (LSE: TSCO), are down 16% and 30% respectively over the past year. Falling profits and the Chinese bribery scandal have torpedoed the Glaxo share price, while cash-strapped customers, cut-price German competition and a loss of strategic direction have sunk Tesco.
The FTSE 100 is falling, and could fall further still. But there's no need to hang around, there are already plenty of bargains to be had.

1 comment:

Money Honey said...

Big names do not necessary means investors can be insulated from both the internal and external factors.

Also, are the problems hitting them is an one-off event and by the next financial year it is business as usual? Research and more research are necessary and not sitting idle is utmost important.