The FTSE 100 is closing in on 8,000 points! Here’s what I’m buying before it’s too late!

As the FTSE 100 keeps gaining momentum, this Fool is on the lookout for bargains. Here’s one stock he’d willingly add to his portfolio.

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The FTSE 100 has been on a roll lately. So much so that it’s edging ever closer to its all-time high of 8,012 points.

It seems investor sentiment is picking up, which is pleasant to see. After a tough few years for retail investors, I’m optimistic better times lie ahead in 2024 and beyond.

While the UK-leading index has been surging, I still see plenty of bargains out there. I’ve got my eye on a few.

Why the charge?

But what’s been driving this strong performance? The FTSE 100 is up 6.3% in the last 12 months. In the last month alone, it has climbed 4.4%. The last time it peaked above 8,000 points was back in February 2023. It stayed above that mark for less than a day.

Well, a few things are contributing to investor bullishness. Firstly, recent data showed that retail spending in the first two months of the year had come in better than expected.

However, what’s more important is the Bank of England’s actions around interest rates. It’s now predicted that we’re in line for cuts sooner than previously predicted. That should offer a major boost to markets.

I’m going shopping

With that in mind, I plan to go shopping. One stock I think could benefit in the months and years to come is Legal & General (LSE: LGEN).

Right now, it looks cheap, trading on just nine times forward earnings. That’s below the index average of around 11. What’s more, its price-to-earnings-to-growth ratio is just 0.8.

Legal & General has suffered recently. Deposits have wavered in the last few years as, understandably, people have tightened their belts and kept cash close by. On top of that, high interest rates have heavily impacted the firm’s asset values.

However, when rates are cut, I’m hopeful that deposits will pick up again and issues such as asset valuations will subside. That makes me think it could be a steal at its current price.

What’s more, the stock boasts an impressive dividend yield of 8%, which is the sixth-highest on the Footsie. Its dividend is forecast to keep rising over the next couple of years as well. In 2025, it could be as high as 9%.

In recent times, it’s put a large emphasis on rewarding shareholders. For example, this year marks the end of its five-year cumulative dividend plan.

As part of this, the firm is on track to return nearly £6bn to shareholders. It raised its dividend per share by 5% last year. In 2024, the board intends to do the same.

I also think the business is in good stead to thrive in the future. It’s a leader in areas such as the Pension Risk Transfer market. It’s no secret that the UK population is ageing. The number of people aged 65-79 is predicted to jump by nearly 30% in the next 40 years. With the products it offers, Legal & General could prosper as a result.

With that in mind, as the FTSE 100 keeps performing strongly, I’m eager to keep picking up bargains. If I had the cash, I’d happily add to my position in Legal & General today.

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.

Charlie Keough has positions in Legal & General Group Plc. The Motley Fool UK has no position in any of the shares mentioned. 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.

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