High-flying FTSE 100 could hit 8,000 by Christmas!

The FTSE 100 (INDEXFTSE:UKX) is nudging all-time highs and Harvey Jones reckons investors might just have a Christmas gift to cherish.

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.

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 benchmark FTSE 100 index is nudging all-time highs once again and naturally, everybody is starting to panic. Well, not everybody, but the usual fear-mongers.

Crashing bores

I am still trembling after reading a harrowing piece telling me that markets are set to crash from their record highs as valuations hit levels last seen in the dotcom bubble and Wall Street Crash. A separate article warns that volatility is set to increase as Trump starts sabre rattling over North Korea. Others say higher interest rates and the end of quantitative easing will deal the death blow.

They might even be right. Who knows? You can always find reasons to call a stock market crash.  The higher markets climb, the more shrill those warnings become. This always happens when the FTSE 100 is buzzing around its all-time high.

Stay calm, be cool

Personally, I think the FTSE 100 at 7,555 is something to celebrate, rather than dread. It manoeuvred the tricky months of September and October with relative aplomb. November is often a good month and over the last 20 years the US stock market, for instance, has posted average gains of 1.9%, making it the third best month. Then we may have the seasonal excitement of yet another Santa rally. For the FTSE 100 to hit that 8,000 mark, the index only needs to rise 6% from here and there are good reasons why that could happen. 

First, China, the world’s second-largest economy, is still booming. Latest trade figures show imports surging by a remarkable 18.7% to September, which suggests Chinese factories continue to see strong demand for their products. The news drove the MSCI’s All-Country World Share index to a new peak of 494.84 points. London isn’t the only market booming.

The IMF reports that the global recovery is continuing, and at a faster pace. “We see an accelerating cyclical upswing boosting Europe, China, Japan, and the United States, as well as emerging Asia,” it said last month, and upgraded its growth projections by 0.1% to 3.6% for this year and 3.7% in 2018.

Look beyond Christmas

The global economic backdrop looks relatively benign: robust growth, falling unemployment, subdued inflation, stable foreign exchange markets, and to top it all, buoyant share prices. You can still make a million on this market.

Naturally, a black swan event could sink us in a moment. The future is not ours to see but that also applies to the doom-mongers who have been calling a stock market crash for the last five or six years, and called it wrong every time.

To 10,000 and beyond

While seeing the FTSE 100 hit 8,000 by would be a lovely Christmas present, in the longer run it is neither here nor there. Markets do not run to a set timetable. They go up and down, and none of us can predict when. History shows the only thing you can say with any certainty is that if you put money into the market and leave it there for the long-term, while reinvesting your dividends for growth, you will end up a lot, lot richer than you started off.

One day the FTSE will break through 9,000, 10,000 and beyond. You should start investing for that day 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 exposure to FTSE 100 performance through the iShares FTSE 100 ETF. He has no position in any of the shares mentioned. 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.

More on Investing Articles

Passive income text with pin graph chart on business table
Investing Articles

Yields of up to 7%! I’d consider boosting my income with these FTSE dividend stocks

The London market has some decent-looking dividend stocks right now, and I’m tempted by these two for growing income streams.

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

I’d put £20K in an ISA now to target a £1,900 monthly second income in future!

Christopher Ruane shares why he thinks a long-term approach to investing and careful selection of shares could help him build…

Read more »

Mature couple at the beach
Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

I was right about the Barclays share price! Here’s what I think happens next

Jon Smith explains why he still feels the Barclays share price is undervalued and flags up why updates on its…

Read more »

Investing Articles

Where I’d start investing £8,000 in April 2024

Writer Ben McPoland highlights two areas of the stock market that he would target if he were to start investing…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Ahead of the ISA deadline, here are 3 FTSE 100 stocks I’d consider

Jon Smith notes down some FTSE 100 stocks in sectors ranging from property to retail that he thinks could offer…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

Why I think Rolls-Royce shares will pay a dividend in 2024

Stephen Wright thinks Rolls-Royce shares are about to pay a dividend again. But he isn’t convinced this is something investors…

Read more »

Investing Articles

1 of the best UK shares to consider buying in April

Higher gold prices and a falling share price have put this FTSE 250 stock on Stephen Wright's list of UK…

Read more »