Shares across the London Stock Exchange are soaring at the start of 2023. The FTSE 100 has just hit four-year highs above 7,800 points. More big rises could be around the corner too as people rush to build their investment portfolios.
Stock market sentiment is soaring on news of falling inflation in the US. Consumer prices fell 0.1% month on month in December, the first such drop since spring 2020. Share investors believe this may translate through to lower interest rates and reduced pressure on consumer spending.
Stock markets can fall as sharply as they rise. And dangers like rising Covid-19 cases in China and the conflict in Ukraine could pull the FTSE 100 lower again. But right now, Britain’s leading index looks on course to pass the record of 7,877.45 points hit in May 2018.
Staying cool
I’m a UK share investor, so I’m pleased to see share values across the London Stock Exchange soar.
And unlike many investors, I’m not kicking myself for not adding to my own portfolio before the New Year rally began. This is because I invest with a long-term view in mind.
Buying shares with the intention of holding them for decades protects me from bouts of temporary volatility. And over this sort of timescale, the gains that FTSE 100 stocks have punched so far in January have only a small effect on my overall returns.
2 cheap shares on my radar
On top of this, there are still plenty of dirt-cheap stocks out there for me to buy if I choose to jump in. Here are a couple of FTSE 100 shares that offer brilliant all-round value today.
#1: Airtel Africa
At a current price of 114p, Airtel Africa trades on a forward price-to-earnings (P/E) ratio of 7.4 times. It also carries a 4% dividend yield, higher than the 3.7% FTSE index average.
Political turmoil in key markets like Nigeria remains a constant threat to earnings. So does rising competition in the African telecoms market.
But the business is still highly appealing to me as a long-term investor. Demand for the mobile and financial services Airtel provides looks set to boom as population and wealth levels in Africa rise. Latest trading numbers showed its total customer base rise almost 10% year on year to 134.7m during the six months to September.
#2: Legal & General Group
As a dividend investor, I’m especially attracted by Legal & General Group’s huge 7.1% dividend yield. Its low P/E ratio of 7.3 times is also highly appealing to me as someone who loves value shares.
Demand for life insurance and investment products can fall hard during tough economic periods. This explains why this particular FTSE 100 stock commands such a low valuation in early 2023.
But I’d buy Legal & General shares because of its bright longer-term outlook. Sales of its pensions and retirement products should rise strongly as Western populations rapidly age. So should demand for its investment services as people become increasingly active in managing their wealth. I expect the company’s share price to soar from current levels of 258.8p.
