Ever wondered just what sort of damage a stock market crash could wreak on your portfolio?

The usual definition of a crash is a 20% or more fall in value in a short timeframe. So a portfolio worth £1,000 could soon fall to a valuation of £800 – or lower.

But, as a long-term investor, just looking at the short-term ebbs and flows of the market does not interest me much. What is the bigger picture?

Learning from history

Let’s take a step back and consider a couple of the most recent stock market crashes.

One was the pandemic crash in 2020. Since then, the FTSE 100 is up 98%.

Before that came the financial crisis. From its low point in 2009, the FTSE 100 has risen 177%.

On top of that, investors in the index have been earning dividends along the way.

The current yield is 2.9%, but investors who bought during market slumps would be earning a higher yield even to this day if they held their shares. That is because yield is a function of dividends — and what an investor paid for the shares in question.

History does not necessarily repeat itself. But a key insight here is that, although the stock market suffered these crashes, it more than bounced back in the years that followed.

Is the big picture misleading?

Of course, focusing on the blue-chip index may not tell the whole story. After all, not all shares fare equally well during a stock market crash. Some may go to the wall altogether.

But the long-term performance data does point to some important truths.

The index rose considerably over time from the lows it hit during those crashes. It also ultimately rose above where it stood before them.

So, even if someone put £1,000 in before the crash and then saw their investment value crumble as markets tumbled (by almost 40% in 2009 and 30% in 2020), if they had been willing to hold on for recovery they would have seen their portfolio get back to where it had been when they invested – and later surpass it. This year has seen the FTSE 100 hit an all-time high.

This matters now, as always

That is a useful lesson when it comes to the value of taking a long-term approach to investing.

Nobody knows when the stock market will next crash. But I believe that no matter how bad that crash, over time a properly diversified portfolio of carefully chosen blue-chip shares ought to recover.

One share worth considering

One share I think investors eyeing market turbulence ought to consider for its long-term potential is M&G (LSE: MNG).

In 2020, the M&G share price fell several times to around £1.10. It is now close to £3 – and still yields 6.9%.

So an investor who bought back in March 2020 could now be earning a dividend yield of around 19%. Wow!

There were risks then, as now. As a financial services firm, M&G might see investors pull money from its funds if the market tanks. That could hurt earnings.

But with its strong brand in the asset management market, large customer base across multiple markets and deep expertise in the financial markets, I believe M&G has ongoing potential for the long term.

The post Here’s what happened to £1,000 invested in the past 2 stock market crashes appeared first on The Motley Fool UK.

C Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended M&g Plc. 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.

Motley Fool UK 2026

The HSBC (LSE: HSBA) share price last week hit a record high of 1,398p, capping a stunning run for one of Britain’s biggest banks.

Over the past year the shares are up 73.5%, and they’ve surged about 220% over five years.

What’s driving the growth?

That kind of climb usually means something’s gone very right. Investors seem to have warmed to HSBC after a long spell when the bank felt out of favour.

Key factors driving growth include:

• Growing focus on Asia.
• Rising interest income.
• Hefty share buybacks.

The recent numbers help explain the excitement.

Revenue’s actually down 9.97% year on year, but net margins are still a healthy 20.57%, showing the bank’s turning a good chunk of what it brings in into profit.

The dividend yield sits at 4.12%, which is appealing versus cash savings, even if it’s only mildly higher than the UK average. But valuation is where it might raise a few eyebrows. Its price-to-earnings ratio of 14.95 is the highest among the big FTSE 100 banks, which tells us a lot of optimism is already baked into the price.

That’s in sharp contrast to more domestic UK banks that often trade on single‑digit multiples. It reflects how the market sees HSBC as a higher‑quality, global operator rather than a plain‑vanilla high street lender.

Risks on the radar

The strong numbers mask potential trouble behind closed doors. Recently, head of banking in Europe and the Americas, Gerry Keefe, resigned – another senior departure after a major restructuring. Leadership changes at that level can slow decisions and unsettle staff, even with an interim boss in place.

On top of that, it faces more risk from the Middle East than most European rivals. Here are some analyst estimates for HSBC’s exposure in the region:

• Roughly 4% of revenue.
• Up to 9% of profit before tax.
• Around 2% of the loan book.

Amid the current conflict, that adds an extra layer of geopolitical risk – even if most clients are large, highly-rated companies.

So what are the professionals saying? 

What the experts think

Analyst coverage is broadly positive but cautious. Recent data shows a mix of Buy and Hold ratings, with only a few Sells. Some brokers think the shares have run ahead of themselves, noting that average 12‑month price targets sit below the current level. 

Meanwhile, others think earnings upgrades and strong capital returns could push the price higher. Commentators have even floated the idea of the stock hitting 2,000p if momentum continues, though that would mean another big leg up from here.

Is HSBC a long-term buy?

For UK investors, the bottom line is simple: HSBC continues to offer appeal as an income‑paying global bank, but it’s no longer obviously cheap. Anyone buying today is paying up for quality, growth in Asia, and chunky dividends.

All the while, accepting the usual banking risks plus extra exposure to the Middle East.

For long‑term investors who can handle some ups and downs, it’s still deserving of consideration in a diversified ISA portfolio. But it probably belongs as one piece of the puzzle rather than the whole picture.

The post Here’s how the HSBC share price reached an all-time high… and what might be next appeared first on The Motley Fool UK.

HSBC Holdings is an advertising partner of Motley Fool Money. Mark Hartley has positions in HSBC Holdings. The Motley Fool UK has recommended HSBC Holdings. 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.

Motley Fool UK 2026

Diageo (LSE: DGE) shares are a reminder that even the biggest FTSE 100 names can take a beating. But they can also bounce back. For the last couple of years, the drinks giant has looked like one of the most compelling recovery plays on the index. Is its long-awaited comeback about to begin?

For years, Diageo looked like a no-brainer buy, with an enviable portfolio of global brands, including Johnnie Walker, Baileys, Smirnoff, Tanqueray and Guinness. It boasts huge diversification too, selling more than 200 brands across 180 countries.

That worked brilliantly, until it didn’t. The shares were hit by a profit warning in November 2023, triggered by falling sales in Latin America and the Caribbean, compounded by inventory issues.

Big FTSE 100 faller

Rather than a blip, it proved a warning shot. Other markets struggled too, as inflation surged and consumers traded down from Diageo’s premium and ultra-premium brands, or simply cut back. It’s also been hit by one-offs as US tariffs hit exports of Canadian whisky and its key Mexican tequila brand Don Julio. There are structural concerns too: younger people appear to be drinking less, while GLP-1 weight-loss drugs were seen as denting demand further. In short, it’s been under fire on all fronts.

The scale of the task called for ‘Drastic’ Dave Lewis, best known for turning around Tesco in its darkest hour. Sir Dave took over in January amid high investor hopes. However, these were dented on 25 February when he reported falling sales in North America and Asia Pacific, a $200m drop in free cash flow to $1.5bn, and stubbornly high net debt of $21.7bn.

Markets should have expected this. At Tesco, Lewis used the classic ‘kitchen sink’ approach, where a new CEO gets all the bad news out early, resets expectations, and create a lower base for recovery. He also halved Diageo’s dividend. That was a blow to long-term investors like me, but should free up around $1bn to help tackle that debt.

Lewis is doing what we’d expect: accelerating the $625m cost-cutting plan, simplifying management and selling non-core brands to raise cash. He’s also rebalancing the portfolio towards more affordable options and using AI to cut marketing spend. There’s less he can do about generational shifts in drinking habits or the potential impact of weight-loss drugs. But his track record suggests he’ll act decisively where he can.

Should I buy this stock today?

The share price has plunged 27% over one year and almost 55% over five. Given that horror show, the forward price-to-earnings ratio of 13.4 could have been even lower. Ignore any websites showing a yield of 5.2%. It’s now half that.

It’s still early days in the Lewis era. It took around 18 months before Tesco shares responded to his efforts. Diageo is one of the worst performers in my SIPP. But hope springs eternal and I still think its shares are worth considering today. We may get a better idea when the Q3 trading update lands on 6 May. That date is in my diary.

I still see Diageo as one of the more intriguing recovery plays on the FTSE 100. Darkest before the dawn and all that. But given recent stock market volatility, there are plenty of alternatives to consider too.

The post Investors tempted by beaten-down Diageo shares should mark 6 May on their calendars now appeared first on The Motley Fool UK.

Harvey Jones has positions in Diageo Plc. The Motley Fool UK has recommended Diageo Plc and Tesco Plc. 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.

Motley Fool UK 2026

Taylor Wimpey (LSE: TW) shares have been in terrible form for a while. Anyone who bought 12 months ago and kept the faith would be looking at a paper loss of over 20%. Those who loaded up five years ago will have seen their stake more than halve in value.

Based on this performance, I’m not surprised if new investors are reluctant to get involved. But are we getting to a point where they might be considered a bargain?

Serious headwinds

It’s not an accident that the UK housebuilder is out of favour with the market. The last five years haven’t exactly been plain-sailing for our economy. We’ve gone from the shock of the pandemic to a cost-of-living crisis to concerns over armed conflict in Europe and the Middle East. All of these developments had or are having an impact on interest rates, building costs and, ultimately, buyer appetite.

Recent results don’t exactly inspire confidence. Back in March, the £3bn cap forecast lower profit for 2026. Somewhere in the region of £400m is now expected. This is down from the £420.6m delivered in 2025.

Of course, this was just an estimate at the time. But I’m not sure the firm’s outlook has improved since. A swift end to the Iran-US conflict looks increasingly unlikely, meaning that oil and energy prices are likely to remain high. This hardly bodes well for the next trading statement, due on 28 April. It might also help to explain why the High Wycombe-based business is proving fairly popular among short sellers.

But is it absurd to even contemplate adding it to a stock market shopping list?

It’s not all bad

I’m not so sure. As things stand, Taylor Wimpey shares change hands at a price-to-earnings (P/E) ratio of 11. That’s not dirt cheap but nor does it imply that the market is ignoring recent events. Rival Persimmon trades on a similar valuation. Barratt Redrow is very slightly less expensive.

The forecast dividend yield of 8.8% further sweetens the investment case. For comparison, the FTSE 250 index in which the company features yields 3.3%.

Yes, those cash distributions are never nailed on and signs of a further deterioration in trading could force CEO Jennie Daly to make another cut. Right now, it’s anticipated that the total dividend will barely be covered by anticipated profit.

Cut or not, whatever is received could still be regarded as sufficient compensation for being asked to wait for a recovery. Moreover, Taylor Wimpey doesn’t look financially stressed as things stand. It’s balance sheet still boasted a net cash position at the end of the last financial year.

Taylor Wimpey shares are worth considering

Things have been torrid for holders and, barring news of a proper peace deal, could stay that way. However, the long-term tailwinds remain in place. Put simply, the UK requires more quality homes to be built. As one of the biggest players, I struggle to believe this company won’t play a role in meeting that demand.

My view is that this is a business that’s under pressure; but it’s not broken. The best time to ponder buying a cyclical stock is surely when the economic chips are down. As such, I reckon the shares are worthy of a closer look.

The post Are Taylor Wimpey shares just too cheap to ignore? appeared first on The Motley Fool UK.

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Barratt Redrow and Persimmon Plc. 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.

Motley Fool UK 2026

The new tax year is with us, which means plenty of folks will be looking at their Stocks and Shares ISA to work towards their passive income goals. One question that might be on minds is: how to achieve a relatively small income stream of £50 a month in the ISA? And will the full £20k (the yearly maximum deposit) be needed to achieve that figure? Let’s answer both questions.

Methods

One popular method of building passive income through an ISA is to target high-yielding dividend stocks. The best of these stocks deliver cash on a regular basis from the earnings of the company. And because they’re paid directly, the income is truly passive. All that’s required is logging into the app once a quarter or two and the money will have been deposited automatically.

What’s a realistic return from such stocks? In the first year, it’s best not to count on much more than 5%. Most stocks pay less than that. And the ones that pay more come with risks. For example, it’s rare to see a stock get near 10% without a dividend cut or a share price increase to cancel it out.

Let’s go back to that £50 a month target (equal to £600 a year). With a 5% return from dividends, an investor would need to invest £12,000 into the ISA to achieve it. That’s some way under the £20,000 deposit limit too. Although savvy investors will know that there’s a lot more to investing than the very first year.

By choosing a stock with a growing dividend and by reinvesting the dividends received, the passive income could grow over the years. With a dividend growth rate of 5% for example, by year five, the passive income is £86 a month and by year 10 the income is £157 a month. While dividends are never guaranteed, this is how people can work towards turning their passive income into a true second income.

Which stocks might fit the bill?

Is this stock worth a look?

I think Aviva (LSE: AV.) is one worth considering. The insurance giant has a dividend yield of 6.1%, which has been growing at an average of 6.57% a year for the last decade. That’s above the FTSE 100 average on both counts. The share price has been rising in recent years too.

The other side of investing in dividend stocks for passive income is never guaranteed. Aviva cancelled the dividend during the pandemic at the height of the panic. That turned out to be more a temporary blip than lasting crisis, but you never know what’s around the corner. A big crisis hitting the UK economy would affect stocks of all stripes.

On balance? Investing for dividends through a Stocks and Shares ISA is an important step in building wealth. While no one can say what the future has in store, there will always be some stocks that outperform the average. I believe Aviva could be worth further research for that reason.

The post Here’s how to target a £50 monthly passive income in a Stocks and Shares ISA appeared first on The Motley Fool UK.

John Fieldsend has positions in Aviva 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.

Motley Fool UK 2026

The road however, has been far from smooth, with the stock up just 17.5% in five years. This shows how far it fell — 46% in 2022 alone — when interest rates jumped.

To be fair, Scottish Mortgage does warn investors that progress is not linear. Its aim is to invest in outlier growth companies that can deliver multibagger returns over the long run, and these can be notoriously volatile.

[Our] investing style comes with a tolerance for volatility as progress is rarely in a straight line. We are extremely comfortable with the fact that the biggest outliers are often the most volatile.

Scottish Mortgage.

What are outliers?

Companies like Amazon, Nvidia and Apple have compounded at growth rates that dwarf the average annual stock market return. Research shows a relatively small handful of these outliers have accounted for the majority of the market’s total wealth creation.

Therefore, Scottish Mortgage aims to “exploit the asymmetric pay-off structure of equities: uncapped upside yet bounded downside”. In other words, the most that can be lost on a stock is 100% (assuming debt isn’t used), but the potential gains are theoretically uncapped.

Below, we can see this strategy in action, with a handful of large winners offsetting the losers easily. 

Why’s the stock surging?

As we can see, the biggest winners so far have been Nvidia, Tesla, SpaceX, ASML, Spotify, and Wise. The Nvidia holding’s delivered an astonishing 132-fold return!

Note, three of these were private companies when Scottish Mortgage first invested (Spotify, Wise, and SpaceX). And it’s the latter — Elon Musk’s rocket and satellite company — which has really driven the stock up sharply in recent months.

If Musk gets his way, the firm could raise $75bn at a whopping valuation of $1.75trn. As such, the trust has updated its valuation of SpaceX to reflect this potential. It now represents 19.3% of assets.

Still worth a look?

For much of the past three years, Scottish Mortgage has traded at a significant discount to its net asset value (NAV). During this time, many writers here at The Motley Fool have been banging the drum for the discounted stock. So it’s nice to see it flying recently.

However, the NAV discount has turned into a 4.4% premium. And there’s always a risk the discount returns, especially if there’s a tech sector meltdown.

Plus, the portfolio has 14% of assets in China. Personally, I think China carries as much political risk as potential reward. However, many innovative companies are emerging out of the world’s second-largest economy, so it arguably deserves some exposure.

Is Scottish Mortgage still worth considering around 1,420p per share? I think so, assuming an investor has a long-term holding period and is willing to stomach the inevitable ups and downs (and ideally look to add on any significant dips).

Looking ahead, I’m bullish on the portfolio, which holds multiple world-class growth companies that could also go public at huge valuations in the next few years. These include AI lab Anthropic, fintech giants Revolut and Stripe, and TikTok owner ByteDance.

The post £7,500 invested in Scottish Mortgage shares 3 years ago is now worth… appeared first on The Motley Fool UK.

Ben McPoland has positions in Nvidia, Scottish Mortgage Investment Trust Plc, and Wise Plc. The Motley Fool UK has recommended ASML, Amazon, Apple, Nvidia, Tesla, and Wise Plc. 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.

Motley Fool UK 2026

A number of factors have contributed to the Rolls-Royce (LSE: RR.) share price rising 1,164% over the last five years. But one of the most exciting is the possibility of a once-in-a-generation opportunity to build a fleet of small nuclear power stations (called SMRs or small modular reactors) that could be the energy of the future.

These clean energy power stations are still in their early stages, but good news like signing deals with Great British Energy, and the country of Czechia, has made Rolls-Royce shares look more and more attractive. And there was another brilliant bit of news in this regard just this week.

The details are that government approval has been reached on the building of the first three of these ‘Made in Britain’ SMRs in the UK. The sites on the island of Anglesey in north Wales had already been pencilled in. But now the official go-ahead has been confirmed.

Why is this so important?

More energy

The simple answer is the country needs more energy – who knew!? Joking aside, while developments in renewables have been impressive, we’re still beholden to dirtier but more reliable sources of energy. Big problem.

Nuclear is one possibility to plug this hole. The French, for instance, pay around half of our electricity prices because they have more nuclear. However, the trials and tribulations of building giant power plants like Hinckley C show that we can’t really rely on these massive projects that run over time and over budget.

This is where SMRs come in. They’re easy to build, relatively cheap, and with no fossil fuels needed. The SMRs on Anglesey should provide energy for 3m homes for 60 years. Several dozen more of them and we might have an answer to our ongoing energy crisis. The Rolls-Royce share price would likely have a good old time of it too.

Sounds pretty good, no? But are there any downsides?

A leg-up

The biggest risk here is that this unproven technology may simply be unviable. This type of power station across the world totals just two at present. There are no guarantees that they will be the world’s future energy.

And even if SMRs do go on to be a raving success, Rolls-Royce might not be the prime beneficiary. There are dozens of companies aiming to pull off the same trick, many with quite different types of technology to the FTSE 100 firm. One American firm is Bill Gates-backed and might have the deeper pockets to be the real winner.

I’ll say here that Rolls-Royce does have the advantage of institutional expertise here. The firm has been making these types of reactors for Royal Navy submarines going back to the 1950s. That’s a leg-up over the competition to some degree.

To sum up? It will be years before we know the true impact of SMRs on the Rolls-Royce share price and the energy supply of the UK or world at large. Personally though, I’m optimistic and think the stock is worth considering.

The post Up 1,164%! Here’s how the Rolls-Royce share price might keep surging appeared first on The Motley Fool UK.

John Fieldsend has positions in Rolls-Royce Plc. The Motley Fool UK has recommended Rolls-Royce Plc. 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.

Motley Fool UK 2026

Amazon.com (NASDAQ:AMZN) is one of the biggest investments in my Stocks and Shares ISA. And the reason is simple – I think its long-term strength is incredible.

The key to this is its business model. But there’s a UK firm with a £6.24 share price that I can see doing something similar – and investors haven’t noticed yet.

Amazon

While AWS is often the focus for investors, Amazon’s marketplace is its largest revenue stream. It’s the biggest and the best in the industry by miles.

The trouble is, margins in this part of the business aren’t intrinsically huge. But that misses an important point. 

Amazon uses its marketplace strength to generate other high-margin revenue. Specifically, this comes from its Prime membership.

The company uses this to put its marketplace even further ahead of its rivals, which leads to more subscriptions. And so on.

This is an extremely powerful business model. And I can see a FTSE 250 company that’s looking to make a similar move.

JD Wetherspoon

I’ve been a bit lonely in having a positive view of JD Wetherspoon (LSE:JDW) shares recently. And that’s fair enough.

Investors have been concerned about the impact of cost inflation. That’s been true across the industry, but especially with the FTSE 250 firm.

A focus on customer value seems to limit its ability to offset rising costs with price increases. And management reinforced this view.

In its last update, the company stated that this year’s profits might be lower than expected. And the stock has been faltering as a result.

There’s no way around the fact that higher costs are a risk. But I see the company making a move to replicate Amazon’s business model.

Franchises

Until recently, JD Wetherspoon hasn’t had a source of revenue like Amazon’s high-margin subscriptions. But that’s changing.

The firm has started opening franchised venues run by local operators. And Wetherspoon’s provides the central admin and IT systems.

Importantly, partners also benefit from the company’s buying power. This gives them huge cost savings. 

That’s been the key to JD Wetherspoon’s lower prices. So it’s a huge advantage for these partner venues. 

Early signs are that this has been transformative for the venues, which is great. But it’s the FTSE 250 firm I’m interested in.

A game-changer?

What does JD Wetherspoon get from letting other operators use its supply chain? Three very big, very important advantages.

The first is a franchise fee (as well as a possible percentage of revenues). And this comes at virtually no cost to the company.

The second is that the firm benefits from expansion with none of those rising costs. These are left to local operators. 

The third is that it gets additional scale. And this reinforces the firm’s key strength, which is its ability to buy in bulk.

I think those are some key advantages. Especially with rising costs making things tough for hospitality companies.

A bargain buy?

JD Wetherspoon’s scale has always given it a cost advantage. But it’s starting to turn this into a source of high-margin revenues.

This could be extremely powerful. It both reinforces the firm’s key competitive strength and widens its margins in a time of higher costs.

It’s the model that’s worked for Amazon. And it’s another reason I think investors should take a closer look at £6.24.

The post How this £6.24 UK stock is copying Amazon’s winning tactics appeared first on The Motley Fool UK.

Stephen Wright has positions in J D Wetherspoon 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.

Motley Fool UK 2026

There’s a famous adage in the market to “sell in May and go away”, then return to buying stocks towards the end of the year. This comes from the theory that the market typically underperforms between November and May. Yet there are many sceptics about the idea, so who’s right?

Investment horizon

Depending on what index you use to track performance, along with how far back you go, the validity of selling stocks in May and buying back late in the year is very mixed. In some years, it works. In others, you’ll have given up the potential for more profit.

Yet the point I think some people miss is that it contrasts a short-term investor with a long-term one. If I’ve bought a stock that I think has the potential to do really well in the coming years, what’s the point of selling it for a few months? Sure, I could be able to buy it back at a slightly cheaper price. But the opportunity cost of not owning it could be massive. Further, if I think it’s got good potential, there’s no logical reason for me to want to sell it, unless it rockets higher in price.

When we look at 2026, the adage doesn’t make sense even at a broader market level. We’re seeing a strong stock market recovery. This is being fuelled by an increasing belief that the situation in the Middle East may be past the worst. If we do see further de-escalation and the easing of supply chain problems, the market could be set for a strong rally over the summer. In that case, I don’t think it makes sense to sell at all.

Of course, this doesn’t mean all stocks will go up. There may be situations where a struggling company deserves to be removed from a portfolio. But from a high-level view, selling now ahead of May doesn’t really make sense to me.

Trending higher

In terms of a company that I think is primed to do well in the coming months, I’ve got my eye on Investec (LSE:INVP). The specialist bank is up 43% over the past year.

The latest trading update from last month had plenty of encouraging signs. It spoke of delivering “a resilient performance” and of good progress in modernising the digital platform. Revenue growth is supported by increased client activity and positive net inflows into funds under management.

Between now and November, we’ll get further trading updates and quarterly updates on progress. Given the current momentum, I expect the updates to be positive, with the share price then potentially continuing to trend higher. On that assumption, I don’t think it would be wise to avoid the stock until the end of this year.

Of course, I could be wrong. If economic conditions deteriorate, loan losses can spike, wiping out earnings momentum. This could trigger a stock sell-off, meaning that a dip could be bought later in the year.

On balance, I’m thinking seriously about adding the stock to my portfolio. But I think Investec is a good example of a stock that disproves the notion of selling right now in favour of hanging on.

The post Should I sell FTSE 100 stocks ahead of May and go away? appeared first on The Motley Fool UK.

Jon Smith 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.

Motley Fool UK 2026

Associated British Foods (LSE: ABF) shares have been losing ground due to a number of uncertainties surrounding the company. But on Tuesday (21 April), investors got confirmation of the news many of us have been hoping for.

Along with first-half results, the company had this to say: “ABF has announced today that following an in-depth review … the Board of ABF has decided to proceed with a demerger of its retail business (“Primark”) from its food business“.

Following the split, shareholders will own shares of the two separate listed companies. And to me, that has to be a good thing.

Hello ‘new Primark’

Maybe a retail investor likes the look of Primark — which has very much been the jewel in its crown over the longer term. But why would they want to own part of a yeast and bakery ingredients business? Or sugar, or agricultural products? And it works the other way round. ABF’s foods business is quite nicely diversified, but isn’t including cheap undies and shirts going a bit far?

Unfortunately though, the market isn’t responding as enthusiastically as me. As I write, ABF shares are hovering around 4.5% down on the day.

But then, a 17% drop in adjusted operating profit alongside adjusted earnings per share falling 15% can do that. At least the interim dividend is unchanged at 20.7p per share — with a forecast 3.3% yield.

Profit pressure

We shouldn’t be too surprised, not after the company issued a profit warning back in January. And CEO George Weston this time opened with: “We knew the first half of this financial year was going to be challenging and that’s borne out in our financial results.”

Star asset Primark has been struggling under the same pressures as the rest of the retail sector. But Weston added: “Primark continued to make strong progress in re-energising its customer proposition in a difficult clothing market. Our actions in the UK since the autumn drove like-for-like sales growth and market share gains.“

There’s an extra warning on top of the January one however, and I think we all know which part of the world it involves. He added: “We are managing the impacts of the Middle East conflict. Given what we know today, we expect the cost consequences in 2026 to be manageable. However, there is a risk to Primark sales if the conflict persists and consumer spending deteriorates.“

Tricky choice

Those who’ve been keenly watching Associated British Foods now face a decision. Consider buying ABF shares today, and then sell the part we might not want later? Until the demerger, I can easily see more share price weakness, so the price might be right if we take that route. But if we wait until the deed’s done, might that immediately push the individual share prices up?

I’ll wait, and I’ll consider Primark after the split — the CEO did say he expects improvement in the second half. And despite the clear economic danger, I think investors could do well to consider it too. The new food business? I’ve no idea, as I’ve never been interested in it.

The post Time to buy Associated British Foods (ABF) shares after this exciting news? appeared first on The Motley Fool UK.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Associated British Foods Plc. 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.

Motley Fool UK 2026