The answer’s yes. But that’s only as long as the status quo is maintained. If that is the case, I would go so far as saying that the FTSE 100 index could push past 7,000 in the next few sessions.
Why the FTSE 100 index can push ahead
The odds are still strong. Two people have just been vaccinated against Covid-19 in the UK, which means that we are now indeed at the beginning of the end of the pandemic. Of course it’s entirely possible that the vaccine might not work, or have unexpected side effects, but I imagine that there’s a good chance that things will go right.
The economy’s also doing alright. At the very least, it’s responding to the fiscal stimulus. I mean, just look at the real estate sector. Despite slow growth, house prices in the UK are at record levels.
I’m even hopeful on a Brexit deal now. Just the day before yesterday I wrote an article saying that the FTSE 100 index can plunge to 5,000 if we have a no-deal Brexit. But by yesterday things turned around, somewhat. Prime Minister Boris Johnson announced the elimination of contentious clauses, according to a Financial Times report. This basically makes the possibility of a good Brexit deal stronger.
To be fair there are contradictory reports on what’s really going on with regards to the Brexit deal. But if there’s reason for optimism, I’d go with that, like all other FTSE 100 investors seem to be doing.
The FTSE 100 index is already close to 6,600 levels as I write. It has gained over 800 points since the beginning of November. To me it sounds entirely plausible that it can gain another 400–500 by the end of December.
This is all very good.
The big question now is — what should we as investors do about it?
Investing in the bull run
I, for one, am in a mood to book (some) profits. As a result of the recent stock market rally, many of my stock market investments are showing pretty returns. I have no doubt that these quality FTSE 100 shares’ prices will rise even more in the coming years. But I also want to receive some rewards from my investments. One of these is JD Sports Fashion.
The next step will be to re-invest these gains into good stocks that are still quite cheap. Some safe stocks, for instance, have seen share price softening as beaten down stocks’ prospects look better now that the Covid-19 vaccine has been developed. Ocado and Rentokil Initial are two such examples.
I’m also considering loading up on relatively high-risk shares like easyJet and IAG. I’m particularly encouraged since my EZJ buy turned green after months of what looked like a catastrophic meltdown. There are many others to consider that may well double my money soon enough.
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Manika Premsingh owns shares of easyJet, JD Sports Fashion, Ocado Group, and Rentokil Initial. 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.