Stock markets trade for another two days before the year ends while I write this article. And a lot can change in a few days. But since I am ready to take a break soon, it looked like a good time to revisit what I have said about the FTSE 100 index recently.
Where the FTSE 100 index is at
A couple of months ago, I wrote an article titled “Why I think the FTSE 100 index could touch 7,500 before year-end”. Cut to now, and the index closed at 7,429 on 28 December, closing above 7,400 for the second consecutive day. It is the first time in 2021 that the index has touched these levels and for the first time since January 2020. In other words, it is quite possible that before we know it, the index could indeed have touched the level. This was possibly driven by good news that England will not go into lockdown before the start of 2022.
If the momentum continues, we could see the index above 7,500 in today’s trading session itself. After all, it is a less than 1% increase, which is not something particularly out of the ordinary in a single day. And even if it does not happen in one day, it can happen over a period of two days. My basic point is that if investors continue to be bullish, the prediction would have all but come true.
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What could go wrong
That does not mean that things cannot go south from here. If the pandemic has taught me anything, it is that even a comfortable-looking situation can change in a flash. We just have to make the most of the investment opportunities we get irrespective of where we find ourselves in the stock market cycle. At the same time, it does give a fair indication of where the FTSE 100 index is heading. Even if there are fluctuations for the next few days, barring any dramatic news that rocks the markets, I think we are heading for even better times.
What I’d do now
This means, that I can look forward to investing with optimism in 2022. The Omicron variant might still be keeping us in an uncertain place, but the blockages do not seem to be anything like what we have seen in the last two years. FTSE 100 companies have reported more good results than bad, and many are also positive in their outlook. Dividends have been on the rise, with the average FTSE 100 dividend yield at 3.5%. And even though the recovery is slow, it is happening.
There are plenty of FTSE 100 stocks that are likely to do quite well based on these developments across sectors like oil, banks, e-commerce among others. This means that there are plenty of choices for me in the next year. I am looking forward to it.
