I’ve spent the last two or three months piling into FTSE 100 shares as I’m keen to fully participate in the next stock market rally. I don’t know when it will arrive, but I want to be ready when it does. If I don’t fill my boots today, I might regret it tomorrow.
One of the first stocks I bought was wealth manager M&G. The obvious attraction was its dividend as it was yielding almost 10% at the time. Management also seems both willing and able to maintain the payout. It’s risky but could be a highly rewarding way to play the recovery, and I’m already generating some growth on top of my income prospects.
I’ve been on a summer spree
I’ve gone quite big on FTSE 100 financials as I’ve also bought both Legal & General and Lloyds Banking Group. Normally I wouldn’t overload on just the one sector, but I have diversification elsewhere in my portfolio. I feel both L&G and Lloyds will fly higher when interest rates peak and the outlook for both stocks and the housing market finally brightens.
Again, both offer terrific yields, at 8.45% and 5.5%, respectively, and are cheap trading at around six times earnings. Both share prices have picked up in recent days, and I enjoyed reinvesting my first Lloyds dividend. There’s a long way to go. However, given that I plan to hold both for a minimum of 10 years, and ideally longer, that’s fine by me.
I haven’t just been buying dirt cheap dividend stocks. I also bought private equity specialist 3i Group. I’ve had my eye on this for years and I’ve been kicking myself for failing to buy it earlier, because it has been one of the most consistent growers on the index. Murphy’s law said it would crash the moment I bought it, but in fact it has kept edging upwards. I have high long-term hopes for this one.
Now roll on that rally
I’ve got mixed feelings about another purchase, Scottish Mortgage Investment Trust. It aims to invest in the “world’s most exceptional growth companies, whether public or private”. However, it’s made a poor job of it lately, the share price falling by half in 2022 and struggling this year too. I wouldn’t put more money into it today, but I’ll hold what I have.
I’m much happier with my decision to buy mining giant Glencore, which I bought at the point of maximum concern over China. I decided it was too cheap to ignore, trading at around four times earnings. Now I’ll just sit and wait for the economic cycle to swing back in its favour. It should happen, given time. While I wait, it offersa juicy 7.75% yield.
I expected consumer goods giant Unilever to be a slow burner when I bought it, and so it has proved, but that’s fine by me. The stock has done poorly by its exalted standards lately, which again, is why I bought it. Over the decades, I’m confident it’s going to come good.
I’m happy with most of my picks and looking forward to seeing them rebound strongly in the next rally. Let’s hope it’s not far away.
