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I mean, the FTSE 100 price-to-earnings ( P/E) ratio is only about 10.5 (depending on who we ask). That’s a fair bit below its long-term average of around 14 to 15. There is a risk to the dividends, but I can only see it being a short-term thing. I fully expect the cash to flow in the long term, in a market with a huge shortage of supply. I’ve learned one thing from the pandemic days. Investing in high-street retail is risky, and could face a lot of challenges.
At the moment, it looks to me like there’s a fair bit of optimism already built into the valuation of Rolls-Royce shares. A forecast price-to-earnings ( P/E) ratio for the full year of 30 doesn’t look like a screaming buy to me. But the value of our investments is what counts, not the price. And it’s vital that we don’t confuse the two. By 2025, if these forecasts come true, I expect the L&G share price will have gained a bit. So the same dividend cash would provide a lower yield. Stephen has a PhD in Philosophy and teaches at the University of Oxford. He's an enthusiastic Warren Buffett follower and focuses on buying quality businesses at sensible prices. He's also a podcaster with the PlayingFTSE show.I really don’t see it staying at 10% for 20 years. But I think it shows the value of any cash we might invest now, while yields are so high. Uncerainty Owain is a magpie of the investing world -- and not because he gets into a flap. Almost any style of investing might suit him, depending on the bigger picture, and he's held all sorts of companies. Paraphrasing Keynes, he says: “When the market changes, I change my mind -- what do you do?” It might look good to be paying 8% and more. But I think the market can see through it. Just look at the size of those price falls. They’re the biggest of the bunch, over both 12 months and five years. Fears overdone Well, the kids might think I’ve left them a pile of junk in my will. But if they can do better, let them try. But, the City still expects pre-tax profits from the FTSE 100 to rise by 10% this year. That’s above even today’s inflation.
About three-quarters of the trust’s assets are in the UK. The current biggest holding is Legal & General, with Aviva taking the third spot. Royal Dutch Shell is sandwiched in between. The trust is managed with a contrarian approach, and that shows from its big investments in these two depressed sectors – sectors I definitely consider risky now. Defaults would be bad news for Lloyds, the UK’s biggest mortgage lender. So maybe fears like that are behind the latest share price drop. The whole FTSE 100 looks rough right now, but the banks are among the worst affected. That doesn’t surprise me, as the latest threat is all about finance. Financial crunchInvesting in tomorrow's world! I'm focused on identifying growth companies with durable business models and sustainable competitive advantages. My specialty is the Technology Sector but eventually, all companies will incorporate technology elements into their businesses. I've been a Fool for over a decade, and am proud to currently call myself the Editor in Chief of TMF UK. I follow Foolish investing principles, and buy shares in quality companies throughout both bull and bear markets! Foolish Freelancers
Based in London, James is a freelance investment writer for the Fool UK. He also contributes to business and economics publications, having previously worked as a staff writer and editor. James has a PhD in development studies and has contributed to academic work on global supply chains. He also manages his own investment portfolio.
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He has written extensively on the oil market and other commodities markets, Forex, equities, bonds, economics and geopolitics for many publications, including The Financial Times, Euromoney, Financial Times Capital Insights, OilPrice, NewsBase, Risk.net, and FTSE Global Markets.
There’s a thing called net asset value (NAV). That tells me the value of the underlying assets that I own indirectly through my Scottish Mortgage shares. If the shares are above that value, we say they’re trading at a premium. In fact, it’s a near impossible rule to follow literally. We have pretty much zero chance of never seeing our share prices fall. Value vs price Banks and insurance firms feature in the list of biggest dividend rises, too, with HSBC Holdings at the top of the list. What does that say to me? I think it means a lot of folk expect to see dividend cuts this year. So there might not be a lot of trust in these forecasts right now. I'm a freelance personal finance journalist who writes for the Daily and Sunday Express, Reader's Digest, The National newspaper and of course, Motley Fool UK.I’ve been buying investment trusts for years. And one of the key things I keep my eye on is the premium, or the discount. What are those, you might ask? Who says the insurance business is having a tough time this year? Judging by the Legal & General share price, most of the big investment firms, I guess. Good forecasts The Phoenix share price fall has pushed the forecast dividend yield above 11%. The firm looks set to record a loss this year, so maybe that won’t happen. Scottish Mortgage is the only one of these I’ve researched in any detail, and I bought some. I expect more volatility from it in the next couple of years. But I’m happy to take the risk for what I see as its long-term potential.
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