What do Aviva (LSE: AV.), Lloyds Banking Group (LSE: LLOY), and Scottish Mortgage Investment Trust (LSE: SMT) have in common, apart from being FTSE 100 shares?
They’ve all been trading close to their 52-week lows in the past month or so. Oh, and I bought them all when they were a fair bit higher.
Whether there might be any causal connection between these events, I’ll leave others to speculate.
Refocused insurer
Aviva shares have perked up a bit since hitting a low in early September. But we’re still looking at a 38% fall in the past five years, and I’m well down since I bought.
I know the whole sector faces volatility and uncertainty now, and Aviva shares carry short-term risk for sure.
But the company has an enviable dividend record, with an 8% yield forecast for the current year.
Dividends could be squeezed if there isn’t enough cash to go round. And forecasts suggest they won’t be covered by earnings. That’s a worry.
But the tipsters expect earnings to grow strongly in the next couple of years, to cover the dividend 1.3 times by 2025.
That makes me feel more confident about the long-term income prospects.
Disappointing bank
What can we say about Lloyds Banking Group shares? I think nothing else can go wrong, and they can’t fall again. Then it does, and they do.
This year we have high interest rates and a property slump.
Lloyds should enjoy better lending margins. But it’s also the country’s biggest mortgage lender, and I expect to see more bad debt provisions by the end of the year.
There’s a forward price-to-earnings (P/E) of six, and a 6% dividend yield. Even with this year’s risks, I call that cheap.
House prices might be starting to stabilise. And UK inflation fell in August, when economists expected a rise.
So Lloyds shares might be set for a good 2024. But, shhh, don’t tell anyone yet… not before I have the chance to buy more.
Negative growth
Scottish Mortgage Investment Trust buys Nasdaq growth stocks. The problem is, they’ve been growing downwards. And the investment trust‘s shares are down with them.
The price has picked up from its 52-week low. But only a few weeks ago, it wasn’t far off it. And we’ve seen a few false starts in 2023 already.
What might derail the latest bullish hopes? A US stock market crash could do it. And there’s no shortage of headlines across the pond calling for one.
And there are signs that some US stocks are overheating. Then again, there are signs that the Nasdaq might be undervalued.
But I love the confusion, the uncertainty, and the risk. Add in a 19% discount to asset value for the shares, and I want to buy more.
Any lessons?
So what can we learn from my experience with these three purchases?
One lesson might be to never buy anything I just bought, because I bring the kiss of doom to share prices.
Alternatively, if a share price falls and we’re still happy with the underlying company, buy more. I might do that with these three.
