Don't INVEST in the FTSE 100 - for these reasons

I look at whether it is a good time to stop investing in the FTSE 100 due to it poor past performance and growth.

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**Disclaimer**: This video is intended for information and entertainment purposes only. Please ensure that you seek help from a qualified regulated financial professional for any investing advice. Your capital is at risk when investing. Some links are affiliates and I will earn a commission from using them.

[mattgoodwin-king]

The problem is that if investors pull out of the FTSE then it will fuel a downward spiral. I know there are better returns in the S&P but i still like to invest in companies in my home country

[rob_h_]

I remember in the late 2000s people telling me that the US market is dead. Think long term and diversify and it’ll take care of itself

[chrisf]

@10:30, I think you're looking at price performance, not total returns. It's not really a fair comparison. But more importantly : the UK economy may very well be in a poor state, but that should be irrelevant for future returns if the bad news is already priced in (which it surely is, given the amount of doom and gloom in the press). I'm holding onto my FTSE100 and 250 trackers.

[pickashole]

I have a ftse100 ETF with Ishares and global diversification with Vanguards VHYL. The rest of my stock mix has companies that make a lot of their money outside the UK... I'm sticking as it stands as my portfolio is only small

[DirkvanV]

Great video, Mark. Thanks for your insights. Will definitely add an FTSE 100-ETF to my portfolio for diversification. I've got trust in the UK companies due to its strong names and stable dividend pay-outs. Kind regards from The Netherlands. Keep up the nice content and have a nice day!

[WilliamBrown-et]

Not sure I'd invest in the FTSE 100 as an index, which has some pretty poor companies in long-term decline. A better approach is to pick your own UK stocks. There are some great businesses in the UK - and some that are so ridiculously cheap that they are being taken out almost daily. It's sad to lose companies to private equity and takeovers but it does give investors the chance to benefit from cheap stocks.

It's also interesting to take a look at the effect of reinvesting FTSE 100 dividends (which average around 4%) on total return. Reinvesting dividends significantly boosts the index performance and, whilst not brilliant compared to the S&P, it is more respectable than you think. Compare the iShares FTSE 100 tracker between the income class (ticker - ISF) and accumulation class (ticker - CUKX).

[HDB]

My dividend pie on T212 has been pretty solidly in the red except for a recent brief green period has just recently dipped back into the red. SW is still reporting my picks as being mostly undervalue and that value has to return at some point but when?

I'm think of putting my dividend portfolio on hold and invest the money into my ETF's instead

[PDconsultancy]

I have around 50% of my stocks invested in ftse I have waited for many years awaiting for their undervaluation to be recognised and a correction to occur. I am only looking to add the highest quality uk companies now. But will hold what I have. I see the US as tech as overvalued. So will not be looking to add any further and I am even considering taking some profit on those that don’t pay a dividend. As I am now getting close to the point where I want dividend income to contribute to my retirement. My focus now is on building my emergency cash pot (aiming at 12 months) and investing only in high quality European and emerging market stocks mainly through ETFs & funds (as I have little knowledge of many of these companies) that will also contribute to my dividends.

[stevegeek]

Interesting video. I have a small part of my SIPP (5%) invested in the UK, with Fidelity Index UK fund, which tracks the top 350 or so UK companies and has ~4% dividend yield. I was looking recently at the poor performance and wondering if I should ditch it for something more global with similar dividend yield (e.g. VanEck TDGB). I also hold a number of FTSE 100 individual companies in my ISA and they are all firmly in the red. My ISA is down about 15% (£10k) in total, since I started investing in 2020. If I look at how my more recent ISA investments have done (e.g. iShare S&P 500 Tech, IITU, up 10% since last October!) it makes me sick! I feel I should be investing in companies in my home country, but the pathetic performance is pulling my money elsewhere I'm afraid.

[badass]

I have been investing in the FTSE for the last 35 years.
What many gloss over is that American and other companies have had better earnings growth coupled with a rerating of those markets and a derating of the FTSE at the same time.

The higher rating of other markets implies higher risk. Many are assuming the superior profit growth and high rating of US stocks will continue indefinately maybe it will but that is what is required for the suercharged returns to continue.

I have some exposure to the US but I like me some UK stocks at 11X earnings and a 3.8% yield. What are US markets rated at? What are Tech stocks rated at?
23.7X for the S&P 500, 29.66X for the NASDAQ.

[rakadoni]

I have no idea what any of this means or the comments below.
I want to get returns but it seems the risk is too great and confusing.
I will probably just go save in an ISA.

[Kalarandir]

I am of the opinion that the FTSE 100 will continue to struggle as our growth industries are now more likely to be bought out by a US company or list on the NYSE. This leaves us with older established stocks.

[James-stuu]

What about the new pension reforms, i predict the new legislation to benefit the london stock exchange

[montyloads]

I was told recently that between 90-95% of traders that attempt to beat the market fail... if thats the case then buying individual stocks is highly risky and your better off just investing in well diversified global funds, unless your in the boat that america will keep marching away in which case you should just follow the s&p.
As i said this is what im told.. i personally am definitely no expert on such things

[ba]

IMO there's no financial justification at all for a UK bias in a portfolio. Better off with just a global ETF. You could speculate that UK firms will outperform in the future and that their low valuations represent "value", but I'd rather avoid speculation and region picking.

[adrianellis]

Very interesting but I shall still be buying FTSE 100 companies. They may not be the Mega Trends, but the companies do form the bedrock of a steadily compounding portfolio. If the US is the answer to every corporate strategy then the FTSE 100 is in a reasonable position as the UK only accounts for 21% of the FTSE 100 revenue and 25.5% coming from US. Compare this with the S&P 500 where 59% of revenue is drawn from US and it’s clear that for all its world beating credentials, the US market is much more geographically concentrated. The FTSE 100 provides share portfolios as well as its risk/reward ratio, which sits below one. There’s probably plenty of value left in the years to come.

[davidjones]

Im in it just for the dividends and low fees not the growth . Much better performance elsewhere

[seismic]

Kinda can't help but feel that the S&P 500 in general is overpriced because of the huge funds invested in it and people like Warren Buffett saying things like you can't beat it.
If something seriously big happens I can see literally everyone getting out.

[coderider]

Needs pension tax benefits rewards to get money back into it. Maybe punish private landlords too so they will move money back into it.

[davidcunningham]

british stocks are just financial and insurance, ASX is much better!