We are at a very delicate time for global markets and a very touchy moment for the U.K. and its FTSE 100 index.
It is quite possible that the roof is about to fall in for a big crash in stock markets around the world, and the U.K. will not escape if this happens. It might actually do worse than many because the U.K. stock market is systemically weak, its politics in chaos and it might just get worse still.
It’s simply all down to whether the Federal Reserve pivots before Christmas or not, from its Volker-style punish the world to drive out inflation tactic to a more pragmatic, 5%-plus inflation for a few years strategy. If it does not pivot then the pain the Fed predicts will be death through a collapse of asset prices.
Those asset prices are stocks and real estate and the collapse of that wealth will pull the rug on inflation for sure… “buddy can you spare me a dime” style.
But do not despair; if you can dodge the bullet you can party like the Great Gatsby in 1925, except it’ll be 2025. (Maybe you should steer clear of the swimming pool.)
Income investors will be offered a beautiful array of U.K. dividend stocks to load up on the cheap. To look at these shares now you will be forgiven in thinking they are already “on sale” but any crash will crush them along with every other share in the index and their trailing dividend will shoot up even higher.
Here is a list of the top 15 blue chip dividend stocks:
Fifteen stocks makes a pretty solid portfolio as far as diversification goes, and heaven knows the tailing yield on them if the market drops like a brick. What’s more, they are “‘safe” companies so their dividends should be supportable to a great extent even if economies are in trouble as a whole.
Here is a chart to make you gasp:
The FTSE at 6,000 would do wonders for yield, under 5,000 would spin all our heads.
The key thing is not to worry about catching the bottom, it’s more important to miss the top and/or be ready with funds after the worst has passed.
You can continue to buy and hold and simply get additional funds ready if things get nasty, but that takes a level of stoicism few are gifted with. Personally I’m out of the market and waiting.
It will only take another shock somewhere on the financial globe to set off a rout, and until the U.S. reverses its runaway dollar policy, fragility will be in charge.
However, as well as a giant threat, this is a huge opportunity, so why not take care of both sides of the equation and have this list on file in case the above chart really does make that incredible low.
Source: https://www.forbes.com/sites/investor/2022/10/27/15-uk-stocks-to-buy-when-the-balloon-goes-up/