The FTSE 100 is touching all-time highs! Will it crash now?

The FTSE 100 has had a blazing start to the year but could just as easily fall rather than climb from here. Either way, I will do one thing.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

2023 concept with upwards-facing arrows overlaid on a hand with one finger raised, pointing up

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The FTSE 100 hit a new intra-day high of 7,996 yesterday morning and we may not have to wait long before it breaks the 8,000 barrier for the first time ever.

That may feel like an historic moment but 8,000 is only a number, and the index could just as easily fall back next day. In fact, I’d say it’s more likely than not. While history shows that stock markets rise over the longer term, they rarely climb in a straight line.

UK blue-chips are flying

It’s more a case of two steps forward, one step back. Or maybe two, three, or four steps back. Either way, the destination is the same. Markets climb higher given time, and those who invest for the long-term will reap plentiful rewards.

Should you invest £1,000 in Heiq Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Heiq Plc made the list?

See the 6 stocks

I’m pleased to see the FTSE 100 enjoy its day in the sun, though. For years it was overlooked, as those whizzy US tech stocks hogged the limelight. Many investors were so fixated on the FTSE 100’s lack of tech exposure that they failed to see its strengths.

The index is full of solid, established companies with true global reach, as they generate more than three-quarters of their earnings outside the UK. They also pay some of the most generous dividends on earth, with an expected yield of 4% this year, plus share buybacks on top.

This doesn’t look so exciting when Tesla is doubling your money every week, but it does when global stock markets are all over the place, as they have been lately. 

There are still plenty of reasons why the FTSE 100 could climb higher. It remains cheap, trading at just 10.7 times forecast earnings, compared to 15.7 for the rest of the world. That’s a discount of 32%, the widest in decades, according to analysis from investment platform Bestinvest.

Investing is for the long term

Its 4% dividend yield easily beats the global average of 2.3% and also the 3.40% yield on 10-year gilts, bonds issued by the UK government. The world is on the brink of recession but the FTSE 100 has plenty of defensive stocks in the healthcare, tobacco, utilities, energy, and consumer staples sectors.

It isn’t hard to name reasons why the FTSE 100 could fall, either. The world remains on the brink of recession. Inflation is proving sticky, and interest rates may have to stay higher for longer as a result. Geopolitical problems abound, such as the war in Ukraine and rising tensions between the US and China.

So yes, the FTSE 100 could easily crash. After such a bright start to 2023, which has seen the index rise 5.34% year to date, it’s as likely as not. That doesn’t worry me, though. I’m investing for 20 to 30 years and over such a period, I expect the FTSE 100 will make me a fair bit richer.

Any pullback in the months ahead would be an opportunity for me to pick up more FTSE 100 stocks at lower valuations. The index is cheap today, but if it falls it could be even cheaper.

Either way, my personal strategy is exactly the same. Whenever I have cash to spare, I will buy FTSE 100 stocks. That includes today.

Should you buy Heiq Plc now?

Don’t make any big decisions yet.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.

And he believes they could bring spectacular returns over the next decade.

Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows...

When such enormous changes hit a big industry, informed investors can potentially get rich.

So, with his new report, Mark’s aiming to put more investors in this enviable position.

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Vodafone Group Public. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Older couple walking in park
Investing Articles

Could £300 a month invested in US and UK shares reach a million by retirement?

Could an investor retire with a million pounds just by dedicating £300 a month to US and UK shares? Mark…

Read more »

Young Caucasian man making doubtful face at camera
Investing Articles

Is £800 enough to start an ISA?

Is it worth bothering with an ISA with less than £1,000 to spare? This writer believes it may be --…

Read more »

Investing Articles

3 reasons Tesla stock may be a long-term bargain

This writer is keen to buy Tesla stock at the right price. He doesn't think it's there yet -- but…

Read more »

Investing Articles

Nvidia stock is a lot cheaper than before – or is it?

Nvidia stock has been caught in the whirlwind of market volatility. This writer has been waiting to buy, so might…

Read more »

Top Stocks

3 FTSE stocks Fools are eyeing up for choppy markets

A selection of companies listed on the UK stock market on the watchlists of four Foolish investors.

Read more »

Young Black man sat in front of laptop while wearing headphones
Investing Articles

A £10,000 investment in Rolls-Royce shares last week is now worth this…

Harvey Jones says Rolls-Royce shares couldn't escape the volatility of recent weeks, but wonders if the recent dip is a…

Read more »

The flag of the United States of America flying in front of the Capitol building
Investing Articles

Prediction: in 2 years these S&P 500 stocks will be much higher than they are today

These two S&P 500 stocks have been beaten down in recent weeks. But Edward Sheldon expects them to move much…

Read more »

Investing Articles

10% yields! Why a volatile stock market is great news for passive income investors

The recent stock market volatility has given passive income investors the chance to earn double-digit returns. But they still need…

Read more »