Buying shares while the prospects for the FTSE 100 are so uncertain may appear to be an unwise move. After all, share prices could move lower and you may experience paper losses.
However, in the long run, such a strategy may improve your prospects of generating high returns. The past performance of the FTSE 100 shows that it has a solid track record of delivering recoveries after its crashes.
With that in mind, here are two high-yielding large-cap shares that seem to offer good value for money. They could be worth buying today and holding for the long term.
The past six months have been hugely volatile for investors in British Land (LSE: BLND). The real estate investment trust’s share price moved higher as investors became more optimistic about the UK’s economic outlook, but has dropped by 22% since the start of the year.
Further uncertainty could be ahead in the short term for the company’s investors. However, over the long run, its current valuation suggests that it offers a favourable risk/reward opportunity. For example, it trades on a price-to-book (P/B) ratio of just 0.5. This indicates that there is scope for its shares to move significantly higher without becoming overvalued.
Of course, there are risks facing British Land. Reduced demand for retail units due to the growth of e-commerce and an uncertain outlook for the UK economy could hold back investor sentiment. However, its recent results showed that its increasingly limited focus on the retail sector and a strong balance sheet could provide it with improving financial prospects in the long run. As such, now could be the right time to buy a slice of it while it offers a dividend yield of 6.3%.
Another FTSE 100 share that has displayed a substantial amount of volatility in recent months is RBS (LSE: RBS). Its financial prospects also depend to a large extent on the performance of the UK economy, which could mean that investor sentiment is very changeable in the near term.
However, with RBS recently reporting that it exceeded all of its 2019 financial targets, despite experiencing a challenging market, it seems to be making progress in delivering improving levels of performance. It has exceeded its cost reduction target, while net lending growth was ahead of guidance in 2019.
Looking ahead, the bank is forecast to post a rise in its bottom line of 10% in the 2021 financial year. It is expected to yield 9.6% next year, with its dividend due to be covered 1.5 times by net profit. Therefore, it appears to have a wide margin of safety included in its valuation. This could make the present time, although very uncertain, an opportune moment to buy shares in RBS and hold them for the long term.
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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Peter Stephens owns shares of British Land Co and Royal Bank of Scotland Group. The Motley Fool UK has recommended British Land Co. 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.