The FTSE 100 is an index of the largest 100 companies in the U.K by Market Cap!
Due to the global pandemic & subsequent stock market crash, the FTSE 100 is at some of the lowest figures it’s been.
(As you can see from the screenshot it looks like it fell off a cliff in mid February. )
Does this mean the world is doomed? Or could this be a great investment opportunity?
In the words of the arguably the greatest investor of all time, “Be fearful when others are Greedy & Greedy when others are fearful”
Is now one of those times to be Greedy while the general consensus is fearful!
In this video, we’re going to find out. I’m going to delve into detail of the FTSE 100 looking at the companies which make up this index & then show you the best methods of investing into it, if you wish to take advantage of this opportunity!
I will also reveal whether I personally have already invested in the FTSE 100!
LETS DIVE IN!
WHAT IS THE FTSE 100?
The FTSE 100 index is a collection of the largest 100 companies in the U.K by market cap. Companies inside the FTSE 100 include Mammoth oil companies such as Shell & BP including a variety of banking stocks, pharmaceutical companies & many more!
The Oil companies such as Shell & BP have taken a major blow due to the drop in oil demand caused by the lockdown & excessive supply from the US & Saudi Arabia!
The Big U.K Banks such as Barclays & Lloyds have also been hit very hard due to rock bottom interest rates & people struggling to pay their mortgages.
I have videos with a full analysis of each of these stocks & the oil industry. Links below.
SO WOULD IT BE CRAZY to INVEST RIGHT NOW?
I don’t think so & in fact I’ve already invested into the FTSE 100 4 weeks ago at the bottom of the market crash. This has seen me make a few thousand pound profit already despite it being a long term investment. But it’s still at a massively discounted price so it’s not too late.
5 Reasons I HAVE INVESTED in the FTSE 100?
I’m going to give you 5 reasons why I have invested well the consensus is in fear.
5. History
Firstly, the stock market has been through many crashes before & it has always recovered. From the Dot Com bubble in the early 2000’s to the 2008 financial crisis. Stock market crashes have been & gone. Studies have show If you invest for the long term, you will achieve great stock market return.s
(Screenshot)
4. Diversification
The FTSE 100 offers your portfolio instant diversification, across a variety of sectors from Oil, to tech, pharmaceuticals, banking & many more. This type of investment suits those who want a Passive solution meaning you don’t have to buy & sell individual stocks & keep watching the markets!
3. Self Cleansing
The FTSE 100 index is Self cleansing which means if a company starts to do really bad & it’s share price, & revenue fall massively so that it is no longer in the top 100, then it will be replaced automatically by up & coming high flying Companies.
2. British Pounds
As a U.K investor, investing in the FTSE 100 offers me exposure to my local market & thus any returns I see will be Great British Pounds which means I save on conversion fees!
U.K investors also get a £20,000 tax free ISA allowance to invest each year.
For international investors the FTSE 100 offers a better value investment then many other indexes & provides you will exposure to the trustworthy British stock market.
1. Great RETURNS
For example, the average compound return of the FTSE 100 over the last 25 years is 6.4% with dividends reinvested. Compounded this would be a total return of 375%.
For instance, £50,000 invested 20 years ago would be worth £172,000 today!
(That is the power of compound interest, this would be achieved by just simply investing into the FTSE 100 & not touching your investment or having to do any research.
(You money has literally worked for you!)
A £100,000 invested 20 years ago would be £325,806!
For even greater returns you could have invested in the S&P 500 (The 500 largest companies In the USA).(The worlds largest economy)
Over the last 10 years, the S&P 500’s average annualized return of 13.4% is a full three percentage points higher than average! This is mainly thanks to high flying tech giants such as Apple, Amazon, Microsoft, Facebook & Alphabet (Parent company of Google) which now account for 17.5% of the S&P 500.
For example, $50,000 invested 10 years ago would be worth $176,000.
HOW DO YOU INVEST IN THE FTSE 100?
As the FTSE 100 is an index of the UK market you will need to invest in this via an INDEX fund or ETF (Exchange traded fund) which tracks the market as closely as possible.
One of the most popular with very low fees is the VANGUARD FTSE 100 ETF (VUKE). You can also invest In this ETF for FREE using the Free trading apps such as Trading 212 or Free trade app. I will leave a link below where you will get a FREE SHARE worth up to £200 when you sign up & deposit!
I also did a video comparing the two apps, which you can check out on the link below!
WANT even greater returns?
For even greater stock market returns you can invest into individual stocks! I will leave a link to my playlist of my top stock picks for 2020 below. They are all companies which I have analysed & personally invested in!
For example, if you invested just $1000 in Amazon in 1997 when it wen’t public that would now be worth nearly a quarter of a million dollars today!
WHAT DO YOU THINK of the FTSE 100 & INDEX INVESTING?
COMMENT on our stock market investing youtube channel stock
