6 Reasons To Invest In Stocks

March 8, 2018

Is it a good time to buy into FTSE 100 shares? February 2018 was a bit of a roller coaster ride for UK share prices, following the drop in the Dow earlier in the month. Investors looking for a long-term investment home for money could well be nervous about buying shares in the UK. Investing in the FTSE 100 may seem a questionable idea when looking at growth rates over the past few years; however, there are a number of good reasons to consider buying FTSE 100 shares:

6 Reasons To Love The FTSE

1. Greater returns

Buying shares in the FTSE 100 index after a fall in prices could lead to greater long-term returns as the outlook for the index remains positive. Wider market fears may have left some company shares undervalued.

2. Brexit impact

The impact of Brexit on the FTSE 100 has been fairly positive overall. Most listed stocks have a reliance on international earnings opposed to UK earnings, so the Brexit decision boosted financial performance due to weaknesses in sterling. As new trade deals are brought to the table, more opportunities might be created.

3. Global picture

The recent FTSE 100 fall was down to fears regarding higher inflation across the global economy, but the outlook looks promising. In the US, lower taxes and higher rates of spending look likely to result in positive impacts, while China is looking set to continue high GDP growth. The Eurozone is performing at higher levels than it has for many years and the UK is proving surprisingly resilient to the Brexit decision. When considering long-term investment, the FTSE 100 could well be a promising choice for many investors.

4. Bank of England monetary policy

The Bank of England has adopted an extremely cautious approach to potential rises in interest rates in response to higher levels of inflation. Prospects for the future growth of FTSE 100 shares due to interest rate hikes are unlikely to be adversely affected.

5. Dividends

A benefit for all seasons. Dividends can provide a robust and increasing income stream for investors and have proved extremely reliable for ongoing income. Check dividend cover to see if a particular company can maintain or increase dividends.

6. Long-term potential

Investments in the FTSE 100 have proved disappointing in recent years; however, long term the potential for these shares is positive and investors with money to spare over the long haul are likely to see enhanced dividend earnings over the period, alongside improved share prices.



Telegraph – FTSE could be buy of the decade