The FTSE 100 ended the week at less than 6,600. As I wrote this article, approaching mid-day, it was only a little over 6,500, and had briefly dipped below that. So there was no big Friday afternoon recovery.
Are investors carefully rejecting the stocks they think could be most damaged by a coronavirus pandemic, or are the selling everything in blind panic? It looks a lot like the latter to me.
I wonder if the historical insurance connection is behind the Standard Life Aberdeen (LSE: SLA) share price fall? It shouldn’t be, since Standard Life and Aberdeen Asset Management merged to form a new wealth management giant.
The shares have since been a bit volatile, as it looks like it’s taking a couple of years for the merger to smooth itself out. Results for 2019 are due on 10 March, and analysts are expecting a flat year for earnings. But there are EPS rises on the cards for 2020 and beyond, and I think we could be entering a profitable decade.
Dividend yield forecasts had been put at around 6.7%, but that was before this week’s stock market carnage. Standard Life Aberdeen shares have fallen 16% over the past week, and that’s boosted those dividends to a whopping 7.9%.
Some investors might wait and see how last year’s results turn out. But however the year went, I see the shares as a great income buy today.
Housebuilder shares are reeling under combined blows from the coronavirus panic and fears hanging over property markets. That’s helped push Barratt Developments (LSE: BDEV) shares down 15% over the past week.
Is there going to be a house price slump? I don’t think so, not when estimates put the UK’s housing shortage at somewhere between a million and 1.2 million homes. And even if property prices should fall, land prices should follow (though I expect there’d be a lag), housebuilders should be able to maintain decent profit margins.
As for Barratt Developments specifically, the share price crunch has resulted in a forward P/E of only 9.8. Forecast dividend yields have been pushed up too, to 6.4% this year and to 6.8% on 2021 forecasts.
I was already bullish on housebuilders, and now I reckon I’m seeing even better buys.
Investment trusts have been taking a battering this week too, and I’ve got my eye on Scottish Mortgage Investment Trust (LSE: SMT).
Despite its name, it doesn’t really invest in Scotland or in mortgages. But as my Fool colleague Tom Rodgers pointed out a couple of days ago, it does include some of the world’s top tech companies, with Amazon and Tesla among its holdings. Tom rates it a buy, especially as the value of its investments has now grown to £9bn.
Since then, the shares have fallen further, taking them down 14% on the week. With a net asset value of 613p, that’s widened the discount to 11%.
Scottish Mortgage invests for growth, and I reckon if you combine it with one of the week’s depressed dividend-paying investment trusts, you could have a very nice pairing to add to your ISA.
It’s official: global stock markets have been on a tear for more than a decade, making this the longest bull market in history.
But this seemingly unstoppable run of success poses an uncomfortable question for investors: when will the current bull market finally run out of steam?
Opinions are split about whether we’re about to see a pullback — or even a bear market — in 2020. But one thing is crystal clear: right now there’s plenty of uncertainty and bad news out there!
It’s not just the threat posed by the coronavirus outbreak that could cause disruption — Trump’s ongoing trade-war with China and the UK’s Brexit trade negotiations with the EU rumble on... and then there’s the potential threat of both the German and Japanese economies entering recession...
It all adds up to a nasty cocktail with the potential to wreak havoc and send your portfolio into a tailspin.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Amazon and Tesla. 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.